Multiple Choice
A bond with 12 years to maturity has a 7 percent semiannual coupon and a face value of $1,000. (That is, the bond pays a $35 coupon every six months.) The bond currently sells for $1,000. What should be the price of a bond that pays a 7 percent annual coupon and has a face value of $1,000 with the same risk and maturity as the semiannual bond?
A) $970.16
B) $975.82
C) $981.34
D) $985.23
E) $990.33
Correct Answer:
Verified
Correct Answer:
Verified
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