1. A long-term government bond has a face value of $10,000 and a yield to maturity of 3.94%. The bond pays semi-annual coupons, with a coupon rate of 4.40%. If the bond has 19 years left until it matures, what should the price of this bond be?
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94% per year (or 3.94%/2 = 1.97% per semi-annual period) Coupon Rate = 4.40% per year (or 4.40%/2 = 2.20% per semi-annual period) Years to Maturity = 19 years Number of coupon payments per year = 2 Number of periods (n) = 19 years * 2 = 38 Show more…
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