Question

Asked Nov 23, 2019

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Calculate the price of a 6.5 percent coupon bond with 27 years left to maturity and a market interest rate of 5 percent. (Assume interest payments are semiannual and par value is $1,000.) Is this a discount or premium bond?

Step 1

**Calculation of Bond Price:**

The bond price is ** $693.77**.

**Excel Spreadsheet:**

Step 2

**Excel Workings:**

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