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Business, 21.10.2020 16:01 magicallyhello

Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly. Assume that a $1,000,000 par value, semiannual coupon U. S. Treasury note with three years to maturity (YTM) has a coupon rate of 3%. The yield to maturity of the bond is 7.70%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note: $1,051,447.12 $876,205.93 $744,775.04 $552,009.74

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Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the...

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