Suppose you just purchased a 8 year, $1,000 par value bond. The coupon rate on this bond is 7% annually, with interest being paid semi-annually. If you expect to earn a 11% rate of return on this bond, how much did you pay for it? (Round your answer to two decimal point)
Suppose you just purchased a 8 year, $1,000 par value bond. The coupon rate on this bond is 7% annually, with interest being paid semi-annually. If you expect to earn a 11% rate of return on this bond, how much did you pay for it? (Round your answer to two decimal point)
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 8P
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Transcribed Image Text:Suppose you just purchased a 8 year, $1,000 par value bond. The coupon rate on this bond is 7% annually,
with interest being paid semi-annually. If you expect to earn a 11% rate of return on this bond, how much
did you pay for it? (Round your answer to two decimal point)
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