Shelley is considering buying a Union Pacific bond. It pays $35 coupons semiannually. She only wants to hold the bond for 5 years. It has fourteen years until it matures. At the time she sells it, she thinks market rates will rise to 6 percent from their current rate of 4 percent. She has come to you for advice about the bond’s value.

How much should Shelley pay for this bond today?

Answer rating: 100% (QA)

The formula for calculating the price of a bond is PV C 1 ... View the full answer