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compute the price of a 4.6% coupon bond with 10 years left to maturity and a...

compute the price of a 4.6% coupon bond with 10 years left to maturity and a market interest rate of 7% assume interest payments are semi annual

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Answer #1

Using financial calculator
Input: FV= 1000

PMT= 4.6%*1000/2 = $23

N= 10*2 = 20

I/Y = 7%/2 = 3.5%

Find PV as -829.45

In excel it can be computed as =PV(3.5%,20,23,1000)

Hence the price of the bond is $829.45

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