Question: Consider a $10, 000 par value, 10 year bond which matures at par (redemption value=par value) bearing a 5% nominal coupon rate convertible semiannually. (a)

Consider a $10, 000 par value, 10 year bond which matures at par (redemption value=par value) bearing a 5% nominal coupon rate convertible semiannually. (a) Find the price of the bond in order to earn a nominal yield to maturity convertible semiannually of 7%. Is the bond sold at premium or discount? (b) Calculate the book value of the bond at the end of the 4th coupon period. (c) Calculate the the price and price-plus-accrued of this bond halfway through the 5 th coupon period (that is at t = 4.5).

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