The Conceptual Framework, ________________, reflects a centrality of affirmed principles, beliefs, and practices that guide the
1 answer:
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Answer:
1) 13.42%
2) 6.56%
Explanation:
a. Given:
Par value of bonds (FV) = $1,000
Coupon rate = 10%
Coupon payment (pmt) = 0.1 × 1,000 = $100
Present value of bond = $865
Maturity period (nper) = 6
Use spreadsheet function =rate(nper,pmt,-PV,FV)
Yield to maturity when price of bond is $865 is 13.42%
2) If PV is $1166, then yield to maturity is 6.56%
If interest rate is 12%
FV is $1,000
Pmt is $100
nper = 6
The use spreadsheet function =PV(rate,nper,pmt,FV) to compute present value of bond.
Present value of bond is $917.77
Since present value of bond is more high, one can pay $865 for each bond.
