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 rise to 10%,what will the price of the XLR Corporate bond be in three years?
A) $832.89
B) $838.07
C) $1097.63
D) $1,102.85
E) $1,191.43

Question

Quizplus · Accepted Answer

$$P _ { 3 } = \$ 40 \left( \frac { 1 - \frac { 1 } { 1.05 ^ { 34 } } } { .05 } \right) + \frac { \$ 1,000 } { 1.05 ^ { 34 } } = \$ 838.07$$

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