We have a 6%, 20-year bond initially selling at a yield of 10%. It’s price is 65.68. Please show how you attain 65.68.

i = 5% (10 / 2) n = 40 ( 20 * 2) pmt = -3 fv = -100 pv = ? = 65.68

Exactly what I thought- so why am I getting 112.55? Clearly I’m overlooking something here…???

nm… beat me to it

Ok, I see now my P/Y setting was on 2…which I figured because of 2 semi-annual payments, but apparently it should be set on 1…hmm.

The question did not say anything about “semi-annual” coupon payment.

sondin for bonds it’s a given if not stated otherwise that they are semiannual

Thanks. I know something new. Previously I thought if it is not stated otherwise, we assume that it is annual coupon.

This assumption seems logical but doesnot work for some of the questions in schweser. I am hoping in the exam there will be no room for doubts.