Answer:
Bond Price= $1,128.82
Explanation:
Giving the following information:
Time= 13*2= 26
Cupon= (0.069/2)*1,000= 34.5
YTM= 0.055/2= 0.0275
Par value= $1,000
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= 34.5*{[1 - (1.0275^-26)] / 0.0275} + [1,000/(1.0275^26)]
Bond Price= 634.88 + 493.94
Bond Price= $1,128.82
