You have just purchased a municipal bond with a 10000 par, Ask an Expert

Economics

You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous owner received a semi-annual interest payment. The bond rate is 6.6% per year payable semi-annually. You plan to hold the bond for 5 years, selling the bond immediately after you receive the interest payment. If your desired nominal yield is 7% per year compounded semi-annually, what will be your minimum selling price for the bond?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92009104

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