Sofus hf. issues bonds. The bond is unsecured, and bears annual interest payments amounting to 5% of the nominal value of the bond. The nominal value of the bonds is 10 million. ISK The first interest due date is exactly 1 year. The maturity date of the bond is 7 years from now and the entire principal is paid then.

Sofus hf. sells these bonds at a yield of 4%. At what price are the bonds sold?

Answer rating: 100% (QA)

Heres how to find the price at which the bonds are sold 1 Calculate the present value of the bond Th... View the full answer