Consider a 10-year bond with a face value of $1,000, a coupon rate of 6 percent...

 

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Consider a 10-year bond with a face value of $1,000, a coupon rate of 6 percent (with semi-annual coupon payments), and a yield-to-maturity of 7 percent per annum. a) What is the market price of the bond? (4 marks) b) Is it sold at a premium or a discount? (2 marks) Consider a 10-year bond with a face value of $1,000, a coupon rate of 6 percent (with semi-annual coupon payments), and a yield-to-maturity of 7 percent per annum. a) What is the market price of the bond? (4 marks) b) Is it sold at a premium or a discount? (2 marks)

Answer rating: 100% (QA)

a To calculate the market price of the bond we need to find the present value of the bonds ... View the full answer