You bought a $1000 corporate bond for $900 three years ago. It is paying $30 in interest at the end of every 6 months, and it matures in 5 more years. (a) Compute its coupon rate. (b) Compute its current value, assuming the market interest rate for such investments is 4% per year, compounded semiannually.
You bought a $1000 corporate bond for $900 three years ago. It is paying $30 in interest at the end of every 6 months, and it matures in 5 more years. (a) Compute its coupon rate. (b) Compute its current value, assuming the market interest rate for such investments is 4% per year, compounded semiannually.
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
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You bought a $1000 corporate bond for $900 three years ago. It is paying $30 in interest at the end of every 6 months, and it matures in 5 more years. (a) Compute its coupon rate. (b) Compute its current value, assuming the market interest rate for such investments is 4% per year, compounded semiannually.
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