As Bond is Semiannual
Coupon Rate = 4%/2 = 2%
YTM = 3%/2 = 1.5%
Period = 25*2 = 50
Bond Price = Interest*PVIFA(1.5%,50) + Par Value*PVIF(1.5%,50)
= 20 * 34.9997 + 1000*0.4750
Bond Price = $1,174.99 or $1,175
Since, it is more than Maturity Value($1000) by $175, So Bond is at Premium.
Suppose that a 25-year government bond has a maturity value of $1000 and a coupon rate...
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