A U.S. government bond matures in 10 years. Its quoted price is now 96.4, which means the
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A U.S. government bond matures in 10 years. Its quoted price is now 96.4, which means the buyer will pay $96.40 per $100 of the bond’s face value. The bond pays 5% interest on its face value each year. If $10,000 (the face value) worth of these bonds are purchased now, what is the yield to the investor who holds the bonds for 10 years?
Face ValueFace 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...
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Related Book For
Engineering Economy
ISBN: 978-0133439274
16th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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