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Problem 10-3 A bond has a coupon rate of 11 percent and 5 years until maturity.

ID: 2779465 • Letter: P

Question

Problem 10-3

A bond has a coupon rate of 11 percent and 5 years until maturity. If the yield to maturity is 10.1 percent, what is the price of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

             

A bond has a coupon rate of 11 percent and 5 years until maturity. If the yield to maturity is 10.1 percent, what is the price of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Explanation / Answer

Statement showing Cash flows Particulars Time PVF @10.1% Amount PV Cash flows (Intt)                                      1.00          0.9083           110.00                 99.91 Cash flows (Intt)                                      2.00          0.8249           110.00                 90.74 Cash flows (Intt)                                      3.00          0.7493           110.00                 82.42 Cash flows (Intt)                                      4.00          0.6805           110.00                 74.86 Cash flows (Intt)                                      5.00          0.6181           110.00                 67.99 Cash flows (Maturoty price)                                      5.00          0.6181        1,000.00               618.11 Bond Price           1,034.03

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