Payment for the bond


Question: Consider a bond with a face value of $1000. The coupon payment is made semiannually and the yield on the bond is 12% (effective annual yield). How much would you pay for the bond if:

1. The coupon rate is 8% and the remaining time to maturity is 20 years?

2. The coupon rate is 10% and the remaining time to maturity is 15 years?

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Finance Basics: Payment for the bond
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