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the bond quote of a 5 year , 8%, semi-annual coupon bond when the market rate...

the bond quote of a 5 year , 8%, semi-annual coupon bond when the market rate is 10% is?

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Answer #1

Value of Bond =

Where r is the discounting rate of a compounding period i.e. 10%/2 = 5% _ _ (Semi Annual )

And n is the no of Compounding periods 5 years * 2 = 10 years_ _ (Semi Annual )

Coupon 8%/2 = 4%

=

= 308.869397192 + 613.91325351

= $ 922.78

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