Flashcards in Chapter 6 easy review questions Deck (5)

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1

## How do you calculate the price of a bond

###
- is the FV

- shown as a negative in the calculation?

2

## What is interest

### it is the coupon rate

3

## what is interest used for

### to calculate the payment

4

##
ex. 1000 par value bond based on a 6% coupon rate, paid annually

if it was paid semi-annually

###
1,000 x 6% = -60 PMT

.03 / 2 = 0.015 x 1000 = -15 PMT

5