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9 August, 09:05

A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 5 years from now?

a. $884.19

b. $906.86

c. $930.11

d. $953.36

e. $977.20

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  1. 9 August, 09:09
    0
    c. $930.11

    Explanation:

    N = 25

    I = ?

    PV = - 925

    PMT = 85

    FV = 1000

    I = 9.28%

    N = 20

    I = 9.28%

    PV = ?

    PMT = 85

    FV = 1000

    Therefore, The price in 5 years from now will be $930.11
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