A 12-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 6.00% (3.000% of face value every six months). Thereported yleld to maturity is 5.6% (a six-month discount rate of 5.6/2 = 2.8%).a. What is the present value of the bond?b. If the yleld to maturity changes to 1%, what will be the present value?c. If the yield to maturity changes to 8%, what will be the present value?d. If the yield to maturity changes to 15%, what will be the present value?(For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.)a. Present valueb. Present valuec. Present valued. Present value

Face value of the bond = $1,000 Coupon rate = 6% Semi annual coupon rate = 6%/2…

Answered: A 12-year U.S. Treasury bond with a…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 11P

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