Answers to Text Discussion Questions

Given a 10-year bond that sold for $1,000 with a 13 percent coupon rate, what would be the price of the bond if interest rates in the marketplace on similar bonds are now 10 percent? Interest is paid semiannually. Assume a 10-year time period. 12-1. PV of $65 semiannually for n = 20 and i = 5% (table 12-1 or Appendix D) $65 × 12.462 = $810.03 ................
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