Fixed Income Q36

36A bond with 5 years remaining to maturity offers a coupon rate of 9% with interest paid annually. At a market discount rate of 9%, the price of the bond per $100 of par is closest to:

Option : B
Explanation : Using a financial calculator, compute the present value as: N = 5, I/Y = 9%, PMT = $9, FV = $100, CPT PV = ($100). Since the coupon rate is equal to the market discount rate, the bond is priced at par.

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