Henry is planning to purchase a Treasury bond with a coupon rate of 2.81% and face value of $100. The maturity date of the bond is 15 March 2033. (a) If Henry purchased this bond on 5 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a. compounded half-yearly. a. 96.7301 b. 98.2342 c. 98.1339 d. 98.1324

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Question
Henry is planning to purchase a Treasury bond with a coupon rate of 2.81% and face value of $100. The maturity date of the bond is 15 March 2033.
(a) If Henry purchased this bond on 5 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a.
compounded half-yearly.
a. 96.7301
b. 98.2342
c. 98.1339
d. 98.1324
Transcribed Image Text:Henry is planning to purchase a Treasury bond with a coupon rate of 2.81% and face value of $100. The maturity date of the bond is 15 March 2033. (a) If Henry purchased this bond on 5 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 3.11% p.a. compounded half-yearly. a. 96.7301 b. 98.2342 c. 98.1339 d. 98.1324
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