Computation of price of bond with coupon interest rate

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Reference no: EM13825799

Problem:

Consider a bond with a par value of $1,000 that will mature in 10 years. You are given that the investors' required rate of return is 5% per annum.

(a) Calculate the price of the bond to the nearest cent if the coupon interest rate is 6% per annum, paid annually.

(b) Calculate the price of the bond to the nearest cent if the coupon interest rate is 6% per annum, paid half-yearly.

Additional Information:

This question basically belongs to the Finance as well as it explains about computation of price of bond with coupon interest rate given and paid annually and half-yearly.

Reference no: EM13825799

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