An investor just purchased a annual 13 year bond that pays $40 each year for 13 years,

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An investor just purchased a annual 13 year bond that pays $40 each year for 13 years, and $1,000 in the final year. The investor believes she can reinvest the coupon payments each year at a $4.25%, interest rate.

If the yield to maturity on the bond is $4%, then what is the price of the bond?

Related Book For answer-question

Financial Accounting and Reporting a Global Perspective

ISBN: 978-1408076866

4th edition

Authors: Michel Lebas, Herve Stolowy, Yuan Ding

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Posted Date: Dec 01, 2023 03:56 AM

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An investor just purchased a annual 13 year bond that pays $40 each year for 13 years,

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To calculate the price of the bond we need to discount the future cash flows coupon payments and fac... View the full answer

Financial Accounting and Reporting a Global Perspective

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