1. Consider a 10000 par value, 4 year bond bearing a 5% nominal semiannual coupo

Question

1. Consider a 10000 par value, 4 year bond bearing a 5% nominal semiannual coupon rate. Coupons pay out every six-month period, starting six months after the bond is purchased. The bond is purchased for P and earns an annual rate of j compounded semiannually, and the bond redeems at par value. The value (i.e. outstanding balance of the amortization schedule) of the bond immediately after the 3rd coupon is paid is equal to 9247.42. Find the purchase price P. Round your answer to the nearest whole number. Answer:

Explanation / Answer

answer..

Purchasesprice of Face Value of a Bond = F/(1+r)^n =9609.8

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