Answer:
Number of bonds = 84,469 bonds
Explanation:
Given:
Face value M = $1000
Time n = 12 x 2 = 24 semi-annual periods
Yield to maturity i = 5.26% / 2 = 2.63% (semi-annually)
Coupon amount C = [6.54%] $1000/2 = $32.70 (semi-annually)
Computation:
[tex]P = [C][\frac{1-\frac{1}{(1+i)^n} }{i} ]+\frac{M}{(1+i)^n} \\\\ P = [32.70][\frac{1-\frac{1}{(1+0.0263)^{24}} }{0.0263} ]+\frac{1000}{(1+0.0263)^{24}} \\\\ P = 1112.84[/tex]
Number of bonds = $100,000,000/$1,112.84
Number of bonds = 84,469 bonds
