ABC Inc bonds have a face value of $1,000, a coupon rate of 7.2 percent, semiannual interest payments, and mature in 15 years. What is the current price of these bonds if the yield to maturity is 7.2 percent?
$1,020.26 |
||
$1,012.78 |
||
$988.39 |
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$1,010.68 |
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$1,000.00 |
Solution:-
Nper = 15 year * 2 = 30
PMT =
PMT = $36
Rate =
Rate = 3.60%
FV = $1,000
To Calculate Current Price of Bond-
Current Price of Bond is $1,000
The Correct Answer is point E i.e. $1,000
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