Three months ago, Jim purchased 25,000 of U.S. Treasury bonds. These bonds have a 30-year maturity period, and they pay dividends every three months at an APR of 5%. However, today's interest rates for similar securities have risen to a 6% APR (compounded quarterly). In view of the interest-rate increase to 6%, what is the current value of Jim's bonds today?

Three months ago, Jim purchased 25,000 of U.S. Treasury bonds. These bonds have a 30-year maturity period, and they pay dividends every three months at an APR of 5%. However, today's interest rates for similar securities have risen to a 6% APR (compounded quarterly). In view of the interest-rate increase to 6%, what is the current value of Jim's bonds today?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 19P

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