Consider a bond with par value 1000 paying a coupon rate, Ask an Expert

Finance

Consider a bond (with par value = $1,000) paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% per half-year. The bond has 3 years until maturity.

a. Find the bond's price today and 6 months from now after the next coupon is paid. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Current price ............................$

Price after six months........................................ $

b. What is the total (6-month) rate of return on the bond? (Omit the "%" sign in your response.)

Rate of return ........................%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92173697

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