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You Are Told That a $1000 N-Year Bond with Semi-Annual

Question 66

Multiple Choice

You are told that a $1000 n-year bond with semi-annual coupons at j2 = 8%,redeemable at par,will be sold for $700 to an investor who wishes to yield j2 = 12%.If the coupon rate was changed to j2 = 11%,what price would this investor pay for the bond? (Answer to the nearest dollar)


A) $760
B) $775
C) $925
D) $1075

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