Question: Consider a bond with face value $ 1 0 0 0 paying a coupon rate of 2 0 % per year quarterly when the market

Consider a bond with face value $

1000

paying a coupon rate of

20 %

per year quarterly when the market interest rate is only

4 %

per year. The bond has three years until maturity.

(

Please write the mathematical formula by which you will get a solution of Bond Price but you can solve it by using a financial calculator or Excel Calculator.

)

.

.

Find the bond's price today and six months from now after the next coupon is paid.

.

What is the total rate of return on the bond at six months from now after the next two coupons are paid?

(

Suppose the coupons is not reinvested

)

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