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28 Sep 2019
You have just purchased a municipal bond with a $10,000 par value of $9,500. You purchased it immediately after the previous owner received a semiannual interest payment. The bond rate is 6.6% per year payable semiannually. You plan to hold the bond for 5 years, selling the bond immediately after you receive the interest payment. If your desired nominal yield is 7% per year compounded semiannually, what will be your minimum selling price for the bond?
You have just purchased a municipal bond with a $10,000 par value of $9,500. You purchased it immediately after the previous owner received a semiannual interest payment. The bond rate is 6.6% per year payable semiannually. You plan to hold the bond for 5 years, selling the bond immediately after you receive the interest payment. If your desired nominal yield is 7% per year compounded semiannually, what will be your minimum selling price for the bond?
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Darryn D'SouzaLv10
28 Sep 2019