Service

Chat Now

Suppose you buy a 20-year-bond with face value of $1000 which pays annual coupons with a c

Suppose you buy a 20-year-bond with face value of $1000 which pays annual coupons with a c

Suppose you buy a 20-year-bond with face value of $1000 which pays annual coupons with a coupon rate of R=5%. Let’s say that that rate is consistent with the market rates, so you pay $1000 (`par’). After 5 years, right after the 5th coupon has been paid, with 15 years still on the bond, you decide to sell. Rates for comparable bonds are now at 4%. What price will you get for your bond? (Answer: slightly above $1111)

 
Abhinav 02-Dec-2019

Answer (UnSolved)

question Get solution