Explore BrainMass

Explore BrainMass

    Price of Bond

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    One year ago a $1000 face value 6% coupon bond was selling for $918.93. since then, the market return decreased by two percentage points. the bond pays interest semi-annually and now has four years to maturity. the bonds price today is?

    © BrainMass Inc. brainmass.com March 4, 2021, 7:43 pm ad1c9bdddf

    Solution Preview

    We first find the interest rate one year ago. At that time the periods till maturity were 5X2=10 (5years and semi annual). Interest amount is $30 per period, face ...

    Solution Summary

    The solution explains how to determine the price of bond today.