A 17-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 6.00% (3.000%

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A 17-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 6.00% (3.000% of face value every six months). The reported yield to maturity is 5.6% (a six-month discount rate of 5.6/2 = 2.8%).

What is the present value of the bond?
If the yield to maturity changes to 1%, what will be the present value?
If the yield to maturity changes to 8%, what will be the present value?
If the yield to maturity changes to 15%, what will be the present value?

(For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.)
a. present value

b. present value

c. present value

d. present value

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Principles Of Finance

ISBN: 9798439388899

1st Edition

Authors: Julie Dahlquist, Rainford Knight

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Posted Date: Jul 07, 2022 02:52 AM

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A 17-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 6.00% (3.000%

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Solution At Yield to Maturity Present Value of All Future Cash Flows Present Value of Bond Future Cash Flows 17th Year 1000 134 30 10003 As Interest is being Paid Half Yearly Total Installment will be ... View the full answer

Principles Of Finance

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