Problem:
Olsons Clothing Store. The 1,000 par value bonds have quoted annual intrest rate of 13% which is explained semiannually The yield to maturity on the bond is 12% annual intrest. There are 20 years to maturity.
Required:
Question 1: Compute the price of bonds based on semiannual intrest payments.
Question 2: With 15 years maturity if yield to maturity goes down to 10% what will be the new price of the bond?
Note: Please show guided help with steps and answer.