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Apple Bee's 3.45% 2026 bonds are curently yielding 2.19%. The bond is quoting at_____? That is...

Apple Bee's 3.45% 2026 bonds are curently yielding 2.19%. The bond is quoting at_____?

That is all of the information given.
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Answer #1

Considering the bond to be an annual coupon paying bond. As there is no other information provided.

You need to use a Financial calculator to solve this problem. You can download it.

N = 6 (As it is 2020, and the bond will mature in 2026, so 6 years to maturity)

PMT = 3.45% of 1,000 = -34.5 ( The coupon 3.15% is on Face Value, which is considered to be $1,000)

FV = -1,000 (The Face value of bond is $1,000)

I/Y = 2.19 (The YTM of the bond is 2.19%)

CPT + PV = 1,070.1277

So the bond is currently quoting at $107% of the par value.


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