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

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Consider a bond (with par value = $1,000) paying a coupon rate of 6% per year semiannually when the market interest rate is only 5% per half-year. The bond has three years until maturity.

a. Find the bond's price today and six months from now after the next coupon is paid. (Round your answers to 2 decimal places.)

Current price?

Price after six months?

b. What is the total (six-month) rate of return on the bond? (Do not round intermediate calculations. Round your answer to the nearest whole percent.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92846665

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