Assume that Apple bonds have just left the printer and
have a stated coupon of $100 (a coupon
rate of 10%) and a yield –to-maturity of 15%. The bonds mature in 3 years
and the next coupon is due in 1 year. What is the fair price for the bond
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Using a financial calculator:
N = 3,
I/Y = 15,
PMT = -100,
FV = -1,000,
CPT PV = $885.84
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