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    Cash Flow Time and Bond Valuation

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    Please use Excel and show a cash flow time line to solve the following:

    I'm purchasing a 10-year bond with a $1,000 face value that pays interest of $60 semiannually. The yield to maturity is 10 percent with semiannual compounding. What price should I pay for the bond?

    © BrainMass Inc. brainmass.com June 3, 2020, 9:06 pm ad1c9bdddf
    https://brainmass.com/business/bond-valuation/cash-flow-time-bond-valuation-165745

    Solution Summary

    This solution finds the price one should pay for a bond with semiannual compounding.

    $2.19

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