An annual-coupon corporate bond has a 20-year maturity,an 11.5% coupon rate,and a par value of $1,000.The yield to maturity on the bond is 11%.An investor plans to buy the bond today and hold it to maturity,reinvesting the coupon payments at a 9% reinvestment rate.
a. What is the purchase price of the bond?
b. How much will the investor have at maturity?

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The Answer of An annual-coupon corporate bond has a 20-year maturity,an 11.5% coupon rate,and a par value of $1,000.The yield to maturity on the bond is 11%.An investor plans to buy the bond today and hold it to maturity,reinvesting the coupon payments at a 9% reinvestment rate.
a. What is the purchase price of the bond?
b. How much will the investor have at maturity?

An Annual-Coupon Corporate Bond Has a 20-Year Maturity,an 11