Computation of value of bond

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Reference no: EM1310174

Computation of Value of Bond

Consider a bond with face value of $1,000. the coupon payment is made semi-annually and the yield to maturity on the bond is 12% (effective annual yield). How much would you pay for the bond if :

a) The coupon rate is 8% and the time to maturity is 20 years?

b) The coupon rate is 10% and the time to maturity is 15 years?

Reference no: EM1310174

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