Compute the price of bond - Finance Valuation

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```					              Sub: Finance                                                                  Topic: Valuation Of Bond

Question:
Compute the price of bond on the facts presented

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You intend to purchase a 10-year, \$1,000 face value bond that pays interest of \$60 every 6
months. Its yield to maturity is 10 percent with semiannual compounding. What is the price of
the bond?

Solution:

Face value of the Bond                        \$1,000

No of Years                                         10

No of half years                                    20

Interest every half year                          \$60

Yield to maturity                                10%

(Semi Annual
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Description: Compute the price of bond on the facts presented : Your intend to purchase a 10-year, \$1,000 face value bond that pays interest of \$60 every 6 months. Its yield to maturity is 10 percent with semiannual compounding. What is the price of the bond?
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