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Show all work: A 7-year, 8% coupon bond pays interest semi-annually. The bond has a face...

Show all work: A 7-year, 8% coupon bond pays interest semi-annually. The bond has a face value of $1,000. What is the price of this bond if the yield to maturity is 4.0%?

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Answer #1

Calculating Bond Price,

Using TVM Calculation,

PV = [FV = 1,000, PMT = 40, N = 14, I = 0.04/2]

PV = $1,242.12

Bond Price = $1,242.12

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