Question

Consider a 20-year bond with a face value of $1,000 that has a coupon rate of 5.3%

Consider a 20-year bond with a face value of $1,000 that has a coupon rate of 5.3%, with semiannual payments.


 a. What is the coupon payment for this bond?

 b. Draw the cash flows for the bond on a timeline

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Answer #1

a)

Coupon payment:

= $1,000*5.3%/2

= $26.50

b)

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