a) A bond with $40 semi-annual coupons is purchased at a premium to yieldj2= 7%. If the first write-down is $4.33, determine the purchase price of the bond.

(b) A different bond with a par value of $100,000 and coupons at the ratej2= 6.5% is purchased for $96,446.90 to yieldj2= 7% to maturity. Determine the number of years to maturity.

Answer rating: 100% (QA)

Lets solve each part of the question Part a The bond has a face value of 40 and its purchased at a p... View the full answer