Answer:
Bond Price= 1,182.96
Step-by-step explanation:
Giving the following information:
Par value= 1,000
Cuopon= 1,000*0.045= 45
YTM= 3.2%
Number of years (n)= 10
To calculate the price of the bond, we need to use the following formula:
Bond Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
Bond Price= 45*{[1 - (1.032^-19)] / 0.032} + [1,000 / (1.032^19)]
Bond Price= 633.31 + 549.65
Bond Price= 1,182.96
