A $1000 bond with semi-annual coupons is redeemable for $1040.The absolute value of the sum of the write down column (book value adjustment column)is $69.30.What is the price of the bond?

Question

Quizplus · Accepted Answer

The absolute value of the sum of the write down column (book value adjustment column) is $69.30. This means that the book value of the bond is $1040 - $69.30 = $970.70. The price of the bond is the present value of the future cash flows, which is $970.70.

A $1000 Bond with Semi-Annual Coupons Is Redeemable for $1040