Assume that it is February 15, 2012 and there are exactly 8 six-month time periods remaining until maturity for a 30-year US Treasury bond that was originally issued on February 15, 1986. This bond has a coupon rate of 9.25%. The coupons are paid semi-annually. The bond matures on February 15, 2016. The yield to maturity is 0.754%. The bond was sold in face value increments of $100. Using the PVA formula, what is the current price of the bond? Is this bond priced at a premium, at a discount, or at par? Why? Begin with the general formula. Show all your work. PV= $133.41
Assume that it is February 15, 2012 and there are exactly 8 six-month time periods remaining until maturity for a 30-year US Treasury bond that was originally issued on February 15, 1986. This bond has a coupon rate of 9.25%. The coupons are paid semi-annually. The bond matures on February 15, 2016. The yield to maturity is 0.754%. The bond was sold in face value increments of $100. Using the PVA formula, what is the current price of the bond? Is this bond priced at a premium, at a discount, or at par? Why? Begin with the general formula. Show all your work. PV= $133.41
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Assume that it is February 15, 2012 and there are exactly 8 six-month time periods remaining until maturity for a 30-year US Treasury bond that was originally issued on February 15, 1986. This bond has a coupon rate of 9.25%. The coupons are paid semi-annually. The bond matures on February 15, 2016. The yield to maturity is 0.754%. The bond was sold in face value increments of $100. Using the PVA formula, what is the current price of the bond? Is this
PV= $133.41
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