Assuming the appropriate YTM on the Sisyphean bond is 7.5%,then the price that this bond trades for will be closest to:

Question

Quizplus · Accepted Answer

The price of a bond is calculated as the present value of its future cash flows, discounted at the appropriate YTM. In this case, the bond has a face value of $1000, a maturity of 10 years, and a semi-annual coupon rate of 6%. The appropriate YTM is 7.5%. Using the bond pricing formula, we can calculate the price of the bond as follows:```Price = $1000 * [1 - (1 + 0.075/2)^(-10*2)] / (0.075/2) = $957.38```Therefore, the price that this bond trades for will be closest to $957.

Assuming the Appropriate YTM on the Sisyphean Bond Is 7