The Lo Sun Corporation offers a 5.1 percent bond with a current market price of

Question

The Lo Sun Corporation offers a 5.1 percent bond with a current market price of $746.50. The yield to maturity is 8.58 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?

5.84 years

29.27 years

23.35 years

11.68 years

22.39 years

The Lo Sun Corporation offers a 5.1 percent bond with a current market price of $746.50. The yield to maturity is 8.58 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?

5.84 years

29.27 years

23.35 years

11.68 years

22.39 years

Explanation / Answer

Price of Bond = P.V. of future payments at Yield to Maturity.

Thus,
746.50 = 5.1%*0.5*1000*[(1 + 8.58%)-0.5 + (1 + 8.58%)-1 +

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.