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Input	Output
Calculate the value of bond B shown in the following table, all of which pay interest semiannually. <image 1>	Google: Gemini Pro Vision 1.0 mmmu / FinancePublic The correct answer is $561.25 First, calculate the semiannual coupon payment: $1000 * 12% / 2 =$ 60 Next, calculate the number of semiannual periods until maturity: 20 years * 2 = 40 periods Then, calculate the present value of the bond's future cash flows using the semiannual yield to maturity of 6%: $60 / (1 + 0.06)^1 +$ 60 / (1 + 0.06)^2 + ... + $60 / (1 + 0.06)^40 +$ 1000 / (1 + 0.06)^40 = $561.25 Expected Answer: 1000 Difficulty: Hard Subfield: Managerial Finance

Input

Output

Calculate the value of bond B shown in the following table, all of which pay interest semiannually. <image 1>

Google: Gemini Pro Vision 1.0

mmmu / FinancePublic

The correct answer is $561.25

First, calculate the semiannual coupon payment: $1000 * 12% / 2 =$ 60

Next, calculate the number of semiannual periods until maturity: 20 years * 2 = 40 periods

Then, calculate the present value of the bond's future cash flows using the semiannual yield to maturity of 6%: $60 / (1 + 0.06)^1 +$ 60 / (1 + 0.06)^2 + ... + $60 / (1 + 0.06)^40 +$ 1000 / (1 + 0.06)^40 = $561.25

Expected Answer: 1000

Difficulty: Hard

Subfield: Managerial Finance

Input

Input ID: 37019d7f-b85e-4f98-958e-e161a6bfe9d8
Created: February 21, 2024
Permission: Public