finance people help please

[ric1287]

So i have a test tomorrow, and can't figure this out. Any help would be awesome.

you have $22,589 and want to buy BoA 5 1/4% bonds. They want to know how many bonds you can buy.

The answer is 23, making the price of the BoA bonds $982.13. I cannot figure out how they find the price of the bond from just the 5 1/4% (yield im assuming).

thanks.

 

[Noobtastic]

it's a miracle.

 

[JJChicken]

Umm how many years to maturity?

 

[ric1287]

oh yeah

we have quote sheet....this is taking place on 6/1/2007 and the maturity is 11/2014

 

[JJChicken]

lol, also how much coupon rate?

 

[dbk]

Do you not have the formula?

 

[ric1287]

kind of missed a 'couple' classes

I'll just write out the whole quote since i don't exactly know what the 5 1/4% stands for....

BoA: 5.125% (coupon) Nov 2014 (mature) 97.185(high) 96.901(low) 96.901 (last) 5.640(yield)

 

[ric1287]

bumpy

 

[Delita]

Originally posted by: ric1287
kind of missed a 'couple' classes

I'll just write out the whole quote since i don't exactly know what the 5 1/4% stands for....

BoA: 5.125% (coupon) Nov 2014 (mature) 97.185(high) 96.901(low) 96.901 (last) 5.640(yield)

I'm hoping that this is an intro course and you actually aren't a finance major.

 

[CaptainKahuna]

Originally posted by: ric1287
kind of missed a 'couple' classes

I'll just write out the whole quote since i don't exactly know what the 5 1/4% stands for....

BoA: 5.125% (coupon) Nov 2014 (mature) 97.185(high) 96.901(low) 96.901 (last) 5.640(yield)

Seriously all you need in this case is the bond pricing formula. Google it.

Furthermore, if you're a finance major, you may want to re-evaluate your decision.