Me Again Lol Ok Next Question A Bond Will Pay 5 000 At Maturity In 9 Years It Al
Hi! Me again lol. ok next question:
A bond will pay $5,000 at maturity in 9 years. It also makes semiannual interest payments of $400 until maturity. If the discount rate is 7% compounded semiannually, what should be the market price of the bond?
SOLUTIONMarket price of bonds = $7,967.68 PV of interest payments + PV of redemption value= [Semi-annual interest payments x PVAF(3.5%, 18 periods)] + (Redemption value x PVF(3.5%,18 periods)=…
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"
