NotgettingFinance
New member
- Joined
- Jul 31, 2011
- Messages
- 1
Hi. Can someone help an old student trying to go back to college with this fiance problem?
Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods):
0 1 2 3 20
|____________|_______________|____________|______ . . . ______|
$20 $20 $20 $20 + $1000
a. What is the maturity of the bond (in years)?
*This is what I came up with, not sure I'm correctThe maturity of the bond in years would be the value of the six month period at 20 payments for 10 years (6 months x 20 payments = 120 months/12 = 10 years).
b. What is the coupon rate (in percent)?
*I started trying to work it, but not understanding: CPN = (Coupon Rate x Face Value)/(Number of Coupon Payment per year) x 1000/120 = %
c. What is the face value?
*I put some figures in a calculator, not sure: The face value is $1102.50
Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods):
0 1 2 3 20
|____________|_______________|____________|______ . . . ______|
$20 $20 $20 $20 + $1000
a. What is the maturity of the bond (in years)?
*This is what I came up with, not sure I'm correctThe maturity of the bond in years would be the value of the six month period at 20 payments for 10 years (6 months x 20 payments = 120 months/12 = 10 years).
b. What is the coupon rate (in percent)?
*I started trying to work it, but not understanding: CPN = (Coupon Rate x Face Value)/(Number of Coupon Payment per year) x 1000/120 = %
c. What is the face value?
*I put some figures in a calculator, not sure: The face value is $1102.50