The City of Pawnee offers 5.65 percent coupon bonds with semiannual payments and a yield to maturity of 6.94 percent. The bonds mature in seven years. What is the market price per bond if the face value is $1,000?A) $949.70 B) $929.42 C) $936.48 D) $902.60 E) $913.48

The market price of a bond is the price at which the bond is currently trading in the market. It is the price that an investor is willing to pay for the bond, taking into account the expected future cash flows from the bond and the current market conditions.

To find the market price per bond if the face value is $1,000, you need to use the bond pricing formula. The bond pricing formula is:

Bond price = CF / (1 + YTM/n)^(nt) + CF / (1 + YTM/n)^((nt)-1) + ... + CF / (1 + YTM/n) + CF / (1 + YTM/n)^(1-n) + FV / (1 + YTM/n)^(t*n)

Where:

CF is the annual coupon payment

YTM is the yield to maturity

n is the number of times per year that the bond pays interest (in this case, n = 2 because the bond pays interest semiannually)

t is the number of years to maturity (in this case, t = 7)

FV is the face value of the bond (in this case, FV = $1,000)

Plugging in the values given in the problem, we get:

Bond price = CF / (1 + YTM/n)^(nt) + CF / (1 + YTM/n)^((nt)-1) + ... + CF / (1 + YTM/n) + CF / (1 + YTM/n)^(1-n) + FV / (1 + YTM/n)^(t*n)

= $57.25

Hence, the market price per bond is $57.25.

To learn more about market price from the given link:

https://brainly.com/question/14612966

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