A bond that pays interest semiannually has a coupon rate of 5.08 percent and a current yield of 5.37 percent. The par value is $1,000. What is the bond's price

$997

Explanation:

The price of the Bond is its Present Value. thus we need to discount the future cash flows (payments and capital repayments) to find the price as follows.

Note : I am using a financial calculator here

FV = $1,000

P/Yr = 2

N = 1 x 2 = 2

PMT = ($1,000 x 5.08 %) ÷ 2 = $25.40

YTM =  5.37 %

PV = ?

Conclusion

Assuming the Bond Matures in 1 year, the bond's price is $997

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