Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. suppose a semiannual coupon bond with a 7% annuali

Suppose a semiannual coupon bond with a 7% annualized coupon rate has an annual yield of...

80.2K

Verified Solution

Question

Finance

Suppose a semiannual coupon bond with a 7% annualized couponrate has an annual yield of 5% compounded semiannually. It maturesin 10 years to its face of $10,000. 1)Compute the price. 2) Whatits modified duration?

Answer & Explanation Solved by verified expert
4.2 Ratings (956 Votes)
1Price of the Bond The Current Price of the Bond is the Present Value of the Coupon Payments plus the Present Value of the face Value Face Value of the bond 10000 Semiannual Coupon Amount 350 10000 x 7 x Semiannual Yield to Maturity 250 5 x Maturity Period 20 Years 15 Years x 2 The Price of the Bond Present Value of the Coupon Payments Present Value of the face Value 350PVIFA 250 20 Years    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Suppose a semiannual coupon bond with a 7% annualized couponrate has an annual yield of 5% compounded semiannually. It maturesin 10 years to its face of $10,000. 1)Compute the price. 2) Whatits modified duration?

Other questions asked by students

Q

Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for...

Finance
Q

Mr. Mark Smith loved gardening. He had several expensive tools that he kept in his yard....

Psychology
Q

Explain how individuals navigate organizational politics. Define leadership and followership. write here by computer not by hand...

General Management
Q

Jake Company, which manufactures electrical switches, uses a standard cost system and carries all inventories at standard....

Accounting
Q

20 B OXER Ox 3 X 3 X ER 10 X 3 X x R...

Calculus
Q

Throughout the 2018 2019 baseball season a player has accrued the following statistics Singles 57...

Algebra
Q

Determine the value of h in the translation. Describe the phase shift (use a phrase...

Algebra
Q

Paige owns 1,000 shares of Grubstake Mining & Development common stock. Grubstake is organized as...

Accounting
Q

The Nash Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase...

Accounting
Q

Journal entry worksheet 1 The owner invests $6,500 cash and $3,500 of equipment in the...

Accounting
Q

Narchie sells a single product for $50. Variable costs are 60% of the selling price,...

Accounting
Q

\ The petty cash fund of $200 for George Company appeared...

Accounting