coupons. If you require a return of 3.50% on this instrument, how much would you offer to pay for it today? [Present the answer rounded to two decimal places, e.g. 1035.16]

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 8P
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You are considering the purchase of a coupon bond with a face
value of $1,000, which matures in 14 years, and pays 4.15% (annual)
coupons. If you require a return of 3.50% on this instrument, how
much would you offer to pay for it today? [Present the answer
rounded to two decimal places, e.g. 1035.16]
Transcribed Image Text:You are considering the purchase of a coupon bond with a face value of $1,000, which matures in 14 years, and pays 4.15% (annual) coupons. If you require a return of 3.50% on this instrument, how much would you offer to pay for it today? [Present the answer rounded to two decimal places, e.g. 1035.16]
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