A bond with 15 years until maturity has a coupon rate of 6.4 percent and a yield
ID: 2737469 • Letter: A
Question
A bond with 15 years until maturity has a coupon rate of 6.4 percent and a yield to maturity of 6.9 percent. What is the price of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
A bond with 15 years until maturity has a coupon rate of 6.4 percent and a yield to maturity of 6.9 percent. What is the price of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Explanation / Answer
1 Face value (FV) $ 1,000 2 Coupon rate 6.40% 3 Number of compounding periods per year 1 4 = 1*2/3 Interest per period (PMT) $ 64.00 5 Number of years to maturity 15 6 = 3*5 Number of compounding periods till maturity (NPER) 15 7 Market rate of return/Required rate of return 6.90% 8 = 7/3 Market rate of return/Required rate of return per period (RATE) 6.90% Bonds price PV(RATE,NPER,PMT,FV)*-1 Bonds price $ 954.17
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