If $1,000 is the proper price for the semiannual bond, what is the proper price for the annual payment bond?

Semiannual bond has kNom = 10%, with EFF% = 10.25%. Should earn same EFF% on annual payment bond, so:

10 10.25 100 1000

N I/YR PV PMT FV

-984.80

INPUTS

OUTPUT

Previous slide

Next slide

Back to first slide

View graphic version