A 10 year bond has a fixed coupon of 5%. It is now 7 years from maturity and current interest rates are 6%.
Required:
Question: What is the market price of the bond?
Note: Please provide equation and explain comprehensively and give step by step solution.
a. $944
b. $1,000
c. $1,058
d. $1,350
Note: Please provide reasons to support your answer.