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Question 20 (1 point) Use the following information to answer 16-20. An 8-year, 10 percent semiannual coupon bond, with a par
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Answer #1

Semi annual Coupon =10%*1000/2 =50
Number of Periods =2*8 =16
PV =1060
FV =1000
YTM using Financial Calculator
N=16;PMT=50;PV=-1069;FV=1000;CPT I/Y =4.4672%
YTM =2*I/Y =2*4.4672% =8.9344%

Number of Periods after 1 year =7*2 =14
Price of Bond in 1 year =PV of Coupons+PV of Par Value =50*((1-(1+4.4672%)^-14)/4.4672%)+1000/(1+4.4672%)^14 =1054.59
Option a is correct option

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