It is now March 1, 2013, and Peter has just purchased a five year U S government bond (FV $1,000) with a quoted price of 93 863 This bond has a 5 percent coupon rate, and the last semi annual coupon payment was made on January 1, 2013 a How much will Peter actually pay for this bond b Had this been...

a The quoted price can be interpreted as a percentage of face value ...

It is now March 1, 2013, and Peter has just purchased a five-year U.S. government bond (FV

Question:

It is now March 1, 2013, and Peter has just purchased a five-year U.S. government bond (FV = $1,000) with a quoted price of 93.863. This bond has a 5-percent rate, and the last semi-annual payment was made on January 1, 2013.
a. How much will Peter actually pay for this bond?
b. Had this been a Canadian government bond, what would be the cash price?

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...