A 6-Year Accumulation Bond with Face Value $10,000 and Redemption

A 6-year accumulation bond with face value $10,000 and redemption value $10,150,reinvests the semi-annual coupons in the bond and pays the accumulated value of them out upon redemption,along with the redemption value.The bond pays interest at j₂ = 4%.What is the price to yield j₂ = 5%?

A) $7735.69
B) $9430.09
C) $9541.62
D) $9598.65

Correct Answer:

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