What is your coupon payment

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Question - You decide you want to experiment a little with investing in bonds. Your grandma gives you $1,000 at graduation and you want to put it away in a safe place. You find a government bond to buy. The bond will mature in 5 years and pays a coupon twice a year (i.e. semi-annually).

Required -

a. If the Annual Coupon Rate is 5%, what is your coupon payment?

b. If you assume that the annual discount rate is 4% compounded semi-annually, how much is the bond worth today?

Reference no: EM132744760

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