At the beginning of the year, you bought a regular bond sixth the following info: Coupon Rate: 8%, Face Value: 10,000, Interest Rate: 5.5%, Maturity: 35 years, Coupon payment is made at the end of each year. a) What should the fair value/price of the bond be when rounded to nearest two decimal places? b) if the market price for this bond is $7,343.43 and you chose to pay that price to have the bond and hold it until maturity, what is the yield to annual rate of return(yield) you should receive? Round to the nearest two decimal places.

Answer rating: 100% (QA)

Bond Valuation and Yield to Maturity Calculation a Fair Value of the Bond We can use the present val... View the full answer