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An 8 3, fifteen year bond yields 6 3 If the yield remains unchang

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An 8.3%, fifteen-year bond yields 6.3%. If the yield
remains unchanged, what will be its price one year hence?
Assume annual coupon payments.
Solution
Face value (FV) $ 1,000.00
Coupon rate 8.30% Number of compounding periods per
year 1 Interest per period (PMT)
$ 83.00 Number of years to
maturity 14 Number of compounding periods till maturity
(NPER) 14 Market rate of return/Required rate of return
per period (RATE) 6.30% Bond price
PV(RATE,NPER,PMT,FV)*-1 Bond price (One year
hence) $ 1,182.49

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An 8.3%, fifteen-year bond yields 6.3%. If the yield remains unchanged, what will be its price one year hence? Assume annual coupon payments. Solution Face value (FV) $ Coupon rate 8.30% year 1 1,000.00 Number of compounding periods per Interest per period (PMT) $ 83.00 Number of years to ma ...
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