Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A bond with par value of 1,000 has payment dates of April 15 and October 15. The nominal coupon rate convertible semiannually is 8%. The bond matures on October 15, 2012. On April 15, 2010, a coupon payment of 40 was made. The bond is sold 80 days later on the settlement date of July 4, 2010 to yield 6% convertible semiannually. There are 183 days between April 15, 2010 and October 15, 2010. Find the market price on July 4, 2010 if compound interest is used in finding the purchase price but simple interest is used in computing the accrued coupon.
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