A U.S.Government T-Bond with a 15-year maturity has a coupon rate of 5%.The bond has a face value of $1,000 and pays its coupons semi-annually.The next coupon is due in six months.The bond trades for $949.38 to yield 5.5%.What are the cash flows from the bond?

Question

Quizplus · Accepted Answer

The cash flows are the sum of the coupons and the face value.
Annual coupon = 0.05 × $1,000 = $50Sum of coupons = $750
Total Cash Flows = $1,000 + $750 = $1,750

A USGovernment T-Bond with a 15-Year Maturity Has a Coupon Rate