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What is the fair market value of a bond with the following features: (a) par value of $1000, (b) coupon payment of $85, and (

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Answer #1
                  K = N
Bond Price =∑ [(Annual Coupon)/(1 + YTM)^k]     +   Par value/(1 + YTM)^N
                   k=1
                  K =10
Bond Price =∑ [(8.5*1000/100)/(1 + 8/100)^k]     +   1000/(1 + 8/100)^10
                   k=1
Bond Price = 1033.55
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