Suppose you consider investing in a 2-year bond. This bond pays semi-annual coupon cash flows of $ 200 after six months, $ 400 in one year from now, $ 600 in 1.5 years from now, and $ 800 in two years years from now. Assume that interest rates are r = 6.0 percent (annual rate, semi-annually compounded). What is the price of this bond?

Answer rating: 100% (QA)

SOLUTION To calculate the price of the bond we need to find the present value of all t... View the full answer