Exhibit 17.2
Use the Information Below for the Following Problem(S)
XLR Corporation just issued a $1,000 par value bond with a 7% yield to maturity, twenty years to maturity, with an 8% semi-annual coupon rate.
-Refer to Exhibit 17.2.If market interest rates are constant,what will the price of the XLR Corporate bond be in three years?
A) $904.29
B) $1,097.63
C) $1,098.50
D) $1,102.85
E) $1,105.62

Question

Quizplus · Accepted Answer

$$P _ { 3 } = 40 \left( \frac { 1 - \frac { 1 } { 1.035 ^ { 34 } } } { .035 } \right) + \frac { \$ 1,000 } { 1.035 ^ { 34 } } = \$ 1,098.50$$

Exhibit 17.2 Use the Information Below for the Following Problem(S)