Consider a corporate bond with a $1000 face value, 8% coupon with semiannual coupon payments, 7 years until maturity, and a ytm of 9%. it has been 57 days since the last coupon payment was made and there are 182 days in the current coupon period. calculate the dirty (cash) price for this bond. a).$1,000b).$948.89c).$989.48d).$96 1.42e).$942.61

$961.42

Explanation:

firstly, we calculate the clean clean price below:

FV= 1,000

PMT= 40 (80 / 2)

I= 4.5 (9 / 2)

N= 14 (7 × 2)

Thus, PV= 948.89

Accrued Interest = coupon × (days since last payment/days in current coupon period)= 40 × (57 / 182) = 12.53

conclusively, dirty price = 948.89 + 12.53 = 961.42

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20

answer; institution based;