A municipal bond with a coupon rate of 2.7 percent has a yield to maturity of 3

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A municipal bond with a coupon rate of 2.7 percent has a yield to maturity of 3.7 percent. Assume a face value of $5,000. If the bond has 12 years to maturity, what is the price of the bond? 

Aug 22nd, 2015

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Aug 22nd, 2015

C = coupon /Interest Payment
F = Face Value      
P = Price market      
n= Years to maturity      
YTM = C +( F-P)/ (F+P)/2      
3.7%  = 135 + (5000-P)/(5000+)/2
Market Price = P = 4522.47  answer    

Aug 22nd, 2015

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Aug 22nd, 2015
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Aug 22nd, 2015
Jun 23rd, 2017
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