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What must be the price of a $ 10 comma 000 bond with a 6.1​% coupon​...

What must be the price of a $ 10 comma 000 bond with a 6.1​% coupon​ rate, semiannual​ coupons, and nine years to maturity if it has a yield to maturity of 11​% ​APR? A. $ 10 comma 143

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Answer #1

Solution:

Face value of the bond = $10,000

Coupon rate = 6.1%

Semi annual coupon payment = $10,000 * 6.1% / 2 = 305

T = 9*2 = 18 semi-annual period

YTM = 11% /2 = 5.5% semi annual rate

The bond price is 7,244.71

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