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4. A bond was issued every 6 months with an interest payment. The coupon rate of...

4. A bond was issued every 6 months with an interest payment. The coupon rate of the bond is 12%. Bond yield to maturity is 14%. The nominal value of the bond is 100 TL. The term of the bond is 5 years. What is the market price of this bond? Is this bond a discount or a premium bond?

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Answer #1

market price of bond = 92.98 TL

Hence, the bonds current market price is less than nominal value of bond therefore the bond is discount bond.

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