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Bond value--annual payment Answer: e Diff: M
83. A 6-year bond that pays 8 percent interest semiannually sells at par ($1,000). Another 6-year bond of equal risk pays 8 percent interest annually. Both bonds are noncallable and have face values of $1,000. What is the price of the bond that pays annual interest?
a. $689.08
b. $712.05
c. $980.43
d. $986.72
e. $992.64
Bond value--annual payment Answer: a Diff: M
84. A 10-year bond with a 9 percent semiannual coupon is currently selling at par. A 10-year bond with a 9 percent annual coupon has the same risk, and therefore, the same effective annual return as the semiannual bond. If the annual coupon bond has a face value of $1,000, what will be its price?
a. $ 987.12
b. $1,000.00
c. $ 471.87
d. $1,089.84
e. $ 967.34
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