Question

A bond was issued three years ago at a price of $1,064 with a maturity of six years, a yield-to-maturity (YTM) of 8.25% compounded semi-annually, and a face value of $1,000 with semi-annualy coupons. What is the price of this bond today immediately after the receipt of today's coupon if the YTM has risen to 9.50% compounded semi-annually?

Question 13 options:

	$903
	$928
	$953
	$978
	$1,003

Answer 1

B 1064 8.25% 9.50% A 1 Price of the bond at issue date 2 YTM at issue 3 YTM now 4 5 6 Coupon payment per period 7 Price of the bond now $48.12 $1,003

Calc:

А B 1 Price of the bond at issue date 1064 2 YTM at issue 0.0825 3 YTM now 0.095 4 5 6 Coupon payment per period I=PMT(B2/2,6*2,-B1,1000) 7 Price of the bond now |=PV(B3/2,3*2,-B6,-1000)