Assume the government issues a semi- annual bond that matures in 5 years with a face value of $1,000 a coupon yield of 10 percent.What would be the price if the yield to maturity (semi-annual compounding) on similar government bonds were 8%?

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Q: The corporation has issued a bond which has a P1,000 par value and a 15% annual coupon interest…

A: Solution Coupon Interest (C) = 1000*15% = 150 n = 10 periods F = 1000 P = 1250