Malcolm Technology issued a new series of bonds on January 1, 1985. They were sold at par ($1,000) have a coupon rate of 10% and mature in 20 years. Coupon payments are made semi-annually. (1) Interest rates had risen to 12% by 2000. What would the price of the bond be on December 31, 1995?

Malcolm Technology issued a new series of bonds on January 1, 1985. They were sold at par ($1,000) have a coupon rate of 10% and mature in 20 years. Coupon payments are made semi-annually. (1) Interest rates had risen to 12% by 2000. What would the price of the bond be on December 31, 1995?

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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Malcolm Technology issued a new series of bonds on January 1, 1985. They were sold at par ($1,000) have a coupon rate of 10% and mature in 20 years. Coupon payments are made semi-annually.

(1) Interest rates had risen to 12% by 2000. What would the price of the bond be on December 31, 1995?

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