You have paid $980.30 for an 8% coupon bond with a face value of $1,000 that mature

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You have paid $980.30 for an 8% coupon bond with a face value of $1,000 that mature in five years. You plan on holding the bond for one year. If you want to earn a 9% rate of return on this investment, what price must you sell the bond for? Is this realistic?

Consider a bond with a 7% annual coupon and a face value of $1,000. Complete the following table:

Years to Maturity	Discount Rate	Current Price
3	5
3	7
6	7
9	7
9	9

What relationship do you observe between yield to maturity and the current market value?

Calculate the duration of a $1,000 6% coupon bond with three years to maturity. Assume that all market interest rates are 7%.

Related Book For answer-question

College Accounting Chapters 1-30

ISBN: 978-1259631115

15th edition

Authors: John Price, M. David Haddock, Michael Farina

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Posted Date: Oct 24, 2022 03:10 AM

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You have paid $980.30 for an 8% coupon bond with a face value of $1,000 that mature

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a FV 1000 Coupon rate 8 Coupon Amount 80 IY 9 N 1 yr Compute PV 990825 The price of the bond is 9... View the full answer

College Accounting Chapters 1-30

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