The convention in zanadu financial markets is that the, Ask an Expert

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Polycorp Treasury a company in the land of Zanadu is holding a parcel of Zanadu Government Bonds with the face value of $1,000,000. The bonds were issued five years ago and still have five years to maturity. They pay a coupon rate of interest of 11%pa, with interest being paid semi-annually. Currently the market yield quoted for Zanadu bonds is 8% pa. The convention in Zanadu financial markets is that the market yield and coupon rate are quoted as nominal rates. What is the market value of the bonds? Show all working.

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Category:- Basic Finance
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