A three-year bond with 10% coupon rate and $1,000 face value yields 8%.Assuming annual coupon payments,calculate the price of the bond.
A)$857.96
B)$951.96
C)$1,000.00
D)$1,051.54

Question

Quizplus · Accepted Answer

The bond price is calculated using the present value of future cash flows, which includes annual coupon payments and the face value, discounted at the yield rate of 8%.

A Three-Year Bond with 10% Coupon Rate and $1,000 Face