A Bond Has a Maturity Value of $50,000 Payable in 4

question 45

Essay

A bond has a maturity value of $50,000 payable in 4 years. These bonds have a 7% coupon rate payable semi-annually, and the market yield was 4% when the bonds were purchased.
Required:
a. Is this a discount bond or a premium bond?
b. Calculate the amount required to purchase this bond at the beginning of the 4-year period.

---

Definitions:

Systemic Respiration

The overall process of gas exchange between the external environment and an organism's circulatory system, including inhalation, exchange of gases in the lungs, and oxygenation of tissues.

Cellular Respiration

The metabolic process in cells where biochemical energy from nutrients is converted into adenosine triphosphate (ATP), releasing waste products.

Paranasal Sinuses

Air-filled spaces within the bones around the nasal cavity that help to warm, moisten, and filter the air we breathe.

Nasal Cavity

The interior space of the nose, involved in breathing and olfaction, lined with hairs and mucous membranes.