You are considering a 30-year, $1,000 par value bond. Its coupon rate is 11%, and interest is paid semiannually. If you require an "effective" annual interest rate (not a nominal rate) of 7.2%, how much should you be willing to pay for the bond? Do not round intermediate steps. Round your answer to the nearest cent.
You are considering a 30-year, $1,000 par value bond. Its coupon rate is 11%, and interest is paid semiannually. If you require an "effective" annual interest rate (not a nominal rate) of 7.2%, how much should you be willing to pay for the bond? Do not round intermediate steps. Round your answer to the nearest cent.
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 16P
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You are considering a 30-year, $1,000 par
If you require an "effective" annual interest rate (not a nominal rate) of 7.2%, how much should you be willing to pay for the bond? Do not round intermediate steps. Round your answer to the nearest cent.
I thought the answer was $1372.85 but, it's coming up wrong. Please help.
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