What is the price of a $10,000 bond with a 6.5% coupon rate, semi-annual coupons, and two years to maturity if it has a yield to maturity of 8%? Please use formula not excel
Added by Carrie M.
Step 1
- The face value of the bond (F) is $10,000. - The annual coupon rate (C) is 6.5%. - The bond pays coupons semi-annually, which means it pays twice a year. - The time to maturity (T) is 2 years, but since coupons are paid semi-annually, there are 2 * 2 = 4 payment Show more…
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