Catherine is planning to invest part of the funds she has in her TFSA account into bonds Suppose she is considering investing in Bell Canada 's bonds with a $10 000 face value maturing on April 17, 2026 The bond 's coupon or bond rate is 8 88 percent and interest is paid semi annually The current r...

Because the bond is purchased on an interest payment date the purchase price ...

Catherine is planning to invest part of the funds she has in her TFSA account into bonds.

Question:

Catherine is planning to invest part of the funds she has in her TFSA account into bonds. Suppose she is considering investing in Bell Canada's bonds with a $10 000 maturing on April 17, 2026. The bond's or bond rate is 8.88 percent and interest is paid semi-annually. The current required market rate or yield to market (YTM) for this bond is 4.54 percent. Determine the purchase price of this bond if the purchase is made on April 17, 2017.
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...