The Amount of Time for a Bond to Mature
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Beach Combers International has 5.75% coupon bonds outstanding with a current market price of $689.40. The yield to maturity is 11.20% and the face value is $1,000. Interest is paid semiannually. How many years is it until these bonds mature?
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Solution Summary
This solution calculates the number of year it will take for 5.75% coupon bonds to mature.
Solution Preview
The duration is 10 years.
By taking 10 as the duration, the rice of the bond is $677.04, which is close to the price.
PV of coupons = $340.74
Here ...
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