Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): The timeline starts at Period 0 and ends at Period 50. The timeline shows a cash flow of $ 20.38 each from Period 1 to Period 49. In Period 50, the cash flow is $ 20.38 plus $ 1,000. Period. Cash Flows 0 1 $20.38 2 $20.38 49. $20.38 50. $20.38 + 1,000 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value?
Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): The timeline starts at Period 0 and ends at Period 50. The timeline shows a cash flow of $ 20.38 each from Period 1 to Period 49. In Period 50, the cash flow is $ 20.38 plus $ 1,000. Period. Cash Flows 0 1 $20.38 2 $20.38 49. $20.38 50. $20.38 + 1,000 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value?
Chapter5: The Cost Of Money (interest Rates)
Section: Chapter Questions
Problem 10PROB
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Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods):
The timeline starts at Period 0 and ends at Period 50. The timeline shows a cash flow of $ 20.38 each from Period 1 to Period 49. In Period 50, the cash flow is $ 20.38 plus $ 1,000.
Period. Cash Flows
0
1 $20.38
2 $20.38
49. $20.38
50. $20.38 + 1,000
a. What is the maturity of the bond (in years)?
b. What is the coupon rate (as a percentage)?
c. What is the face value?
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