A $100 bond with annual coupons at 5% for the first 10 years and coupons at 4% for the next 5 years will be redeemded in 15 years time. The bond is purchased to yield 4% per annum effective. Find the redemption value of the bond.

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter6: Bonds (debt) - Characteristics And Valuation
Section: Chapter Questions
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5. A $100 bond with annual coupons at 5% for the first 10 years and coupons at 4% for the next 5 years
will be redeemded in 15 years time. The bond is purchased to yield 4% per annum effective. Find the
redemption value of the bond.
Transcribed Image Text:5. A $100 bond with annual coupons at 5% for the first 10 years and coupons at 4% for the next 5 years will be redeemded in 15 years time. The bond is purchased to yield 4% per annum effective. Find the redemption value of the bond.
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