LIAS Inc.bonds have a face value of $1,000,mature in 17 years,pay interest semiannually,and have a coupon rate of 6.35 percent.The next interest payment will be paid 4 months from today.What is the clean price of this bond if the market rate of return is 6.5 percent?

Question

Quizplus · Accepted Answer

Bond value = [(0.0635 × $1,000)/2] × ({1 - 1/[1 + (0.065/2)]^17×2}/(0.065/2))+ {$1,000/[1 + (0.065/2)]^17×2} = $984.70 11ea6c22_9305_3036_9716_e592bd8f66a6_TB1200_00 The clean price excludes any accrued interest.

LIAS IncBonds Have a Face Value of $1,000,mature in 17 Years,pay