Answer:
Price of Bond = 585.43
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
The question does not provide information about interest payment therefore the price of the bond is the present value.
PV of redemption Value
PV = F × (1+r)^(-n)
F-1000, r-0.055, n- 10 ×2
PV = 1,000 × 1.055^(-10)
PV = 585.43
Price of Bond =$ 585.43
