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Calculate the interest on interest from the bond assuming that the semiannual coupon payments can be reinvested at 4.5% every six months

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3. An investor is considering the purchase of a 10-year 8% coupon bond selling for $934.96 and a par value of $1,000. The yield to maturity for this bond is 9%. Calculate the interest on interest from the bond assuming that the semiannual coupon payments can be reinvested at 4.5% every six months (5 points)

 

Paper#20811 | Written in 18-Jul-2015

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