Question: Mark has a Treasury bond with a par value of
Mark has a Treasury bond with a par value of $ 30,000 and a coupon rate of 6%. The bond has 15 years to maturity. Mark needs to sell the bond and new bonds are currently carrying coupon rates of 8%. At what price should Mark sell the bond?
Answer to relevant QuestionsWhat if Mark’s Treasury bond in the previous problem had a coupon rate of 9% and new bonds still had interest rates of 8%? For what price should Mark sell the bond in this situation? What are mutual funds? What two broad categories of mutual funds exist, and how are they different? Do investors select the securities the mutual fund invests in? What should investors consider when deciding whether to purchase shares of a mutual fund? What characteristics of a mutual fund should be considered? Briefly discuss each characteristic. What is a closed end fund? Describe how closed end funds function. Rena purchased 200 shares of a no load stock mutual fund. During the year she received $ 3 per share in dividend distributions, $ 200 in long term capital gain distributions, and capital gains of $ 1,100 when she sold the ...
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