The yield on a bond is 6% annual. The face value of the bond is $1,000. The bond pays semi-annual coupon. The original maturity of the bond is 10-years. Now, it is 18-months passed, find the price of bond if the annual coupon rate is 8%.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 14P: Current Yield with Semiannual Payments A bond that matures in 7 years sells for $1,020. The bond has...
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The yield on a bond is 6% annual. The face value of the bond is $1,000. The bond pays semi-annual coupon. The original maturity of the bond is 10-years. Now, it is 18-months passed, find the price of bond if the annual coupon rate is 8%.

a. $1,131.66

b. S 878.34

c. $1,000.00

d. $1,142.92

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