A coupon bond pays interest semi-annually, matures in five years, has a par value of $1,000, a coupon rate of 12%, and an effective annual yield to maturity of 10.25%. The price the bond should sell for today is
A. $922.77.
B. $924.16.
C. $1,075.80.
D. $1,077.20.
E. None of the options are correct.
D. $1,077.20.
(1.1025)1/2- 1 = 5%, N = 10, I/Y = 10%, PMT = 60, FV = 1000, Þ PV = 1,077.22.
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