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A bond that matures in 17 years has a ?$1000 par value. The annual coupon interest...

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Finance

A bond that matures in 17 years has a ?$1000 par value. Theannual coupon interest rate is 11 percent and the? market'srequired yield to maturity on a? comparable-risk bond is 14percent. What would be the value of this bond if it paid interest?annually? What would be the value of this bond if it paid interest?semiannually?

A) the value of this bond if it paid interest annually would be$ 808.81

B) answer this: the value of this bond if it paidinterest semiannually would be$____?

Answer & Explanation Solved by verified expert
4.4 Ratings (587 Votes)
BThe value of this bond if it paid interest semiannually The Value of the Bond is the Present Value of the Coupon Payments plus the Present Value of the face Value Face Value of the bond    See Answer
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Transcribed Image Text

A bond that matures in 17 years has a ?$1000 par value. Theannual coupon interest rate is 11 percent and the? market'srequired yield to maturity on a? comparable-risk bond is 14percent. What would be the value of this bond if it paid interest?annually? What would be the value of this bond if it paid interest?semiannually?A) the value of this bond if it paid interest annually would be$ 808.81B) answer this: the value of this bond if it paidinterest semiannually would be$____?

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