Question #122951
a coupon bond is purchased for $900 with the maturity period of 6 years. the coupon payment of $50 is to be paid at the end of each half year. if the desired rate of return (yield rate) is J2=12% p.a. , then the face value of the bond is;
1
Expert's answer
2020-06-22T11:45:01-0400

900=501/(1+0.12/2)1211/1.061+x1.0612900=50*\frac{1/(1+0.12/2)^{12}-1}{1/1.06-1}+\frac{x}{1.06^{12}}

x-the face value of the bond

x=916.87x=916.87


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!
LATEST TUTORIALS
APPROVED BY CLIENTS