Consider a bond paying a coupon rate of 10.25% per year semiannually when the ma

Question

Consider a bond paying a coupon rate of 10.25% per year semiannually when the market interest rate is only 4.1% per half-year. The bond has four years until maturity.

Find the bond's price today and eight months from now after the next coupon is paid.

What is the total rate of return on the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

a.

Find the bond's price today and eight months from now after the next coupon is paid.

  Current price $   Price after eight months

What is the total rate of return on the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

  Total rate of return % per six months

Explanation / Answer

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