Google Answers: Finance Problem (Financial calc. may be necessary)

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Q: Finance Problem (Financial calc. may be necessary) ( No Answer, 0 Comments )

Question

Subject: Finance Problem (Financial calc. may be necessary)
Category: Business and Money > Finance
Asked by: jax26-ga
List Price: $2.00

Posted: 17 Apr 2004 16:15 PDT
Expires: 26 Apr 2004 08:57 PDT
Question ID: 331883

A bond with 12 years to maturity has  a 7% semiannual coupon and a
face value of $1,000.  (That is, the bond pays a $35 coupon every six
months.)  The bond currently sells for $1,000.  What should be the
price of a bond with the same risk and maturity that pays a 7% annual
coupon and has a face value of $1,000?
     Please note:  The solution should be somewhere in between  $900 and $1,100.

Request for Question Clarification by livioflores-ga on 17 Apr 2004 20:20 PDT
Which is the interest rate?

Clarification of Question by jax26-ga on 18 Apr 2004 19:41 PDT
That is all I was given, but I now know the answer must be between $980 and $1,050.

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