LIAS Inc.bonds have a face value of $1,000,mature in 14 years,pay interest semiannually,and have a coupon rate of 5.75 percent.The next interest payment will be paid four months from today.What is the clean price of this bond if the market rate of return is 5.6 percent?

Question

Quizplus · Accepted Answer

Bond value = [(.0575 × $1,000)/2] × ({1 - 1/[1 + (.056/2)]^{14 × 2}}/(.056/2))+ {$1,000/[1 + (.056/2)]^{14 × 2}} = $1,014.42 The clean price excludes any accrued interest.

LIAS IncBonds Have a Face Value of $1,000,mature in 14 Years,pay