An investor buys a bond with face value $6,000, maturing at par in 9 years, coupon...
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An investor buys a bond with face value $6,000, maturing at par in 9 years, coupon rate 6%, for a price to yield 5%. a) What is the price of the bond? b) After 6 years, the investor sells the bond to another investor who wants to receive a yield of 3%. At what price does he sell the bond? An investor buys a bond with face value $6,000, maturing at par in 9 years, coupon rate 6%, for a price to yield 5%. a) What is the price of the bond? b) After 6 years, the investor sells the bond to another investor who wants to receive a yield of 3%. At what price does he sell the bond?
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Answer rating: 100% (QA)
a The price of the bond is calculated using the following formula Price PV of coupon payments PV of ... View the full answer
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
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