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Suppose a 7-year $1000 Par value bond with semi-annual coupons is purchased. The coupon rate is a nominal annual rate of 7.5%, compounded semi-annually. The yield rate is a nominal annual rate of 6%

Suppose a 7-year $1000 Par value bond with semi-annual coupons is purchased. The coupon rate is a nominal annual rate of 7.5%, compounded semi-annually. The yield rate is a nominal annual rate of 6% compound semi-annually.

(a) Find the amount of interest in 6th coupon rate.

(b) Find the amount of principal(write down) in the 6th coupon payment.

(c) After the 6th coupon payment, the bond is sold at market value. The market yield rate at the time the bond is sold is a nominal annual rate of 5% compounded semi-annually. Find the market price of bond.

Jul 16 2021 View more View Less

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