Calculate the cash price, accrued interest, market price, and determine the amount of the bond premium or discount of a bond with a face value of 80,00080,000 , coupon rate of 2.91%2.91% that was issued on January 15th, 1990 and matures in 1515 years, if it is sold on January 15th, 1992 with a market rate of 7.08%7.08% . Assume that all interest rates and payment frequencies are compounded semi-annually and that the redemption price equals the face value.
Question
Calculate the cash price, accrued interest, market price, and determine the amount of the bond premium or discount of a bond with a face value of 80,00080,000 , coupon rate of 2.91%2.91% that was issued on January 15th, 1990 and matures in 1515 years, if it is sold on January 15th, 1992 with a market rate of 7.08%7.08% . Assume that all interest rates and payment frequencies are compounded semi-annually and that the redemption price equals the face value.
Solution
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