How much should you be prepared to pay for a 10-year bond with a 6% coupon,semiannual payments,and a semiannually compounded yield of 7.5%?

Name: How much should you be prepared to pay for a 10-year bond with a 6% coupon,semiannual payments,and a semiannually compounded yield of 7.5%?
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Quizplus · Accepted Answer

Semiannual interest rate = 0.075 / 2 = 0.0375Price = [(0.06 / 2) × $1,000)] {(1 / 0.0375) − [1 / 0.0375(1.0375)^{10 × 2}]} + $1,000 / 1.0375^{10 × 2}Price = $895.78

How Much Should You Be Prepared to Pay for a 10-Year