Calculation of current selling price of a bond

Assignment Help Finance Basics

Reference no: EM13825974

Question

A 10-year Treasury bond with a $1,000 par value has a 12% coupon and pay interest every 6 months. The bond is three years old and has just made its sixth payment. If interest rates fell to 8%, what would price would these bonds sell at?

A. $1,208.25

B. $1,250.51

C. $1,211.26

D. $1,271.81

Summary

The question belongs to Finance and it is about calculation of current selling price of a bond.

Reference no: EM13825974

Questions Cloud

What is the direct quote for the krona : Suppose it is 1990 and the spot direct quotes for the Swedish krona and French franc are $.1395-99 and $.1130-33, respectively. What is the direct quote for the krona in Paris?

The insanity defense : The Insanity Defense Write an essay (Minimum 500 words) based on this week's theory. In the first part of the essay discuss the rationale and standards for mounting an insanity defense.

Explain the critical elements in making decisions : Directions: Examine both the individual aspects of decision-making and the critical elements in making decisions. Make a plan -- including a goal, a list of information and data that you need to gather, and areas where you may be vulnerable. Exa..

What is the required return for Arch Coal stock : According to your research, the growth rate in dividends for Arch Coal for the previous 10 years has been 3.5 percent. If investors feel this growth rate will continue, what is the required return for Arch Coal stock?

Calculation of current selling price of a bond : A 10-year Treasury bond with a $1,000 par value has a 12% coupon and pay interest every 6 months. The bond is three years old and has just made its sixth payment. If interest rates fell to 8%, what would price would these bonds sell at?

Cope with the ambiguity of human freedom : Which is a way some people cope with the ambiguity of human freedom? drifting shared decision making appealing to some type of authority All of the above.

Premium theory of the term structure of interest rates holds : Suppose we observe the following rates: 1R1= .10, 1R2= .16, and E (2r1) = .10. If the liquidity premium theory of the term structure of interest rates holds, what is the liquidity premium for year 2?

What is the net present worth at an interest rate : A project has a first cost of $14,000, uniform annual benefits of $2400, and a salvage value of $3000 at the end of its 10-year useful life. What is the net present worth at an interest rate of 12%?

Premature infant delivery and care from midwives and nursing : Premature Infant Delivery and the Care from Midwives and Nurses

User Account

All Pages