Compute Bond Price Compute the price of a 4.75 percent coupon bond with 15 years left to maturity and a market interest rate of 6.25 percent.(Assume interest payments are semi-annual and par value is $1,000.) Is this a discount or premium bond?
A) Discount
B) Premium N = 30, I = 3.125, PMT = 23.75, FV = 1000, CPT PV = -855.34
Since this is less than $1,000, it is a discount bond.
Correct Answer:
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