Today is the 22nd of May 2020. You are considering buying a bond which pays its next coupon in 32 days and it is 149 days since the last coupon has been paid. At the time the last coupon was paid the bond had 12 more coupons to pay. The bond pays 5.5 per cent coupons per annum, paid half yearly on the basis of a $100,000 face value and the relevant discount rate for these bonds is 4.2% per annum. What is the price of this bond today?

Answer rating: 100% (QA)

To calculate the price of the bond we need to find the present value of its future cash flows 1 Calc... View the full answer