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Consider a 20​-year bond with a face value of $ 1 comma 000 that has a coupon rate of 5.2 %​, with semiannual payments. a. What is the coupon payment for this​ bond? b. Draw the cash flows for the bond on a timel

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Answer:

[tex]\$26[/tex]

Explanation:

Given the bond has a face value of $1,000

Coupon rates is 5.2%

N=20yrs

Semianual payments can be calculated as:

[tex]Coupon=\frac{1}{2}(Coupon \ Rate \times \ Bond \ value)\\=0.5\times0.052\times 1000\\=26[/tex]

Hence the semiannual coupon payments is $26

#Check picture for the timeline of the cashflows.

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