What is the present value of the bond if yield to maturity

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Problem 1: A 7% Commonwealth government bond has three years to maturity. Given that the bond pays coupons semi-annually (i.e. twice a year) and a coupon payment has just been made, what is the present value of the bond if the yield to maturity is 9% and the face value of the bond is $100 000?

A. $88 693.18

B. $95 610.02

C. $101 522.78

D. $105 875.28

Reference no: EM132919990

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