A $10,000 bond with a coupon rate of 5% paid semi-annually has five years to maturity and a yield to maturity of 3%.What is the price of this bond?
A)$9,771.01
B)$2,132.55
C)$7,440.94
D)$9,573.49
E)$10,915.94

Question

Quizplus · Accepted Answer

The bond price is calculated using the present value of future cash flows, which include semi-annual coupon payments and the face value at maturity, discounted at the yield to maturity rate. The correct calculation gives a price of $9,573.49.

A $10,000 Bond with a Coupon Rate of 5% Paid