Question
plz show the calculation thx
A client is considering an investment in a 6%, $5,000
par value, 8-year Hydro Quebec bond. Assuming a discount rate of 7.5%, and semi-annual coupon payments. What amount will this bond sell for? At a premium or at a discount to par value?
*A*. This bond will sell at a discount to its par value at a price of $4,554.86.
B. This bond will sell at a discount to its par value at a price of $4,454.89.
C. This bond will sell at a premium to its par value at a price of $5,554.86.
D. This bond will sell at a premium to its par value at a price of $5,454.34.
Economics