Evaluations for input

The correct answer is $1,245.99.

First, calculate the semiannual coupon payment: $1,000 x 14$70

Next, calculate the number of semiannual periods: 10 years x 2 = 20 periods

Then, calculate the present value of the coupon payments using the formula: PV = C x [1 - (1 + r)^-n] / r where: C = semiannual coupon payment r = semiannual interest rate n = number of semiannual periods

PV = $70 x [1 - (1 + 0.10 / 2)^-20] / 0.10 / 2 PV =$70 x [1 - (1.05)^-20] / 0.05 PV = $70 x [1 - 0.37689] / 0.05 PV =$70 x 0.62311 / 0.05 PV = $872.35

Finally, calculate the present value of the bond: PV of bond = PV of coupon payments + PV of principal PV of bond = $872.35 +$1,000 PV of bond = $1,872.35

Therefore, the value of bond D is $1,872.35.

Expected Answer: 1249

Difficulty: Medium

Subfield: Managerial Finance