Q1: Exactly eighteen months ago BHP Ltd issued bond with 15 yr maturity. The bond's face value is 2 million and the coupon rate is 8.5% p.a. paid half yearly. The bond matures on 24 March 2013 and YTM is 10.25% p.a. compounded half yeary. What is the current bond price?
The answer is: FV 2 000 000, PMT = 85000, i = 0.05125, n = 13.5 * 2 = 27 ( but i don't understand how they got 13.5 ?
Thanks