Held-to-Maturity Security Price Determination
Response to the following :
1. How much should an investor pay for $100,000 of debenture bonds that pay interest every six months at an annual rate of 8%, assuming that the bonds mature in 10 years and that the effective interest rate at the date of purchase is also 8%?
2. How much should an investor pay for $100,000 of debenture bonds that pay $5,000 of interest every six months, have a maturity date in 10 years, and are sold to yield 8% interest, compounded semiannually?