What will be your minimum selling price for the bond


Suppose you have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it instantly after the previous owner received a semiannual interest payment. The bond rate is 6.6% per year payable semiannually. You plan to hold the bond for six years, selling the bond instantly after you receive the interest payment. What will be your minimum selling price for the bond if your desired nominal yield is 10% per year compounded semiannually?

Request for Solution File

Ask an Expert for Answer!!
Macroeconomics: What will be your minimum selling price for the bond
Reference No:- TGS0872303

Expected delivery within 24 Hours