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A bond has a 10-year maturity, an 4% annual coupon rate, with quarterly coupons paid, and...

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Finance

A bond has a 10-year maturity, an 4% annual coupon rate, withquarterly coupons paid, and a par value of $1,000. The annualdiscount rate is 8%. What should be the bond’s price?

Answer & Explanation Solved by verified expert
4.4 Ratings (577 Votes)
Price of the Bond The 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 5000 Quarterly Coupon    See Answer
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Transcribed Image Text

A bond has a 10-year maturity, an 4% annual coupon rate, withquarterly coupons paid, and a par value of $1,000. The annualdiscount rate is 8%. What should be the bond’s price?

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