Business, 04.05.2021 16:10 andybiersack154

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 US Treasury note with five years to maturity has a coupon rate of 3%. The yield to maturity (YTM) of the bond is 11.00%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:. A. $590,626.18B. $796,876.60C. $937,501.88D. $1,125,002.26Based on your calculations and understanding of semiannual coupon bonds, complete the following statements:The T-note described is currently selling at a (A. Premium/ or B. Discount) . Assuming that interest rates remain constant over the life of the note, its price should be expected to (A. Increase/ or B. Decrease) as the T-note approaches maturity . When valuing a semiannual coupon bond, the time period (N) in the present value formula is assumed to have a value of (A. annual/ B. 4-month/ C. 6-month/ or D. 12-month) periods.

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