Vincent purchased a $3,500 bond that was paying a 5.50%coupon rate and had 4 more years to mature. The yield at thetime of purchase was 4.20% compounded semi-annually. a.How much did Vincent pay for the bond? Round to the nearestcent b. What was the amount of premium or discount on thebond?

To calculate the price Vincent paid for the bond, we'll use the present value formula for a…

Answered: purchase was 4.20% compounded…

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purchase was 4.20% compounded semi-annua ch did Vincent pay for the bond? Round to the

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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Question

Vincent purchased a $3,500 bond that was paying a 5.50%
coupon rate and had 4 more years to mature. The yield at the
time of purchase was 4.20% compounded semi-annually. a.
How much did Vincent pay for the bond? Round to the nearest
cent b. What was the amount of premium or discount on the
bond?

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