Suppose in 2018 you buy 3% coupon rate, $100 face value bond for $100 that has 3
Fantastic news! We've Found the answer you've been seeking!
Question:
Suppose in 2018 you buy 3% coupon rate, $100 face value bond for $100 that has 3 years left till
maturity. Suppose in 2019, when interest rates increase to 6%, you decide to sell it.
a) Calculate the selling price of your bond in 2019. How did its value change because of the interest rate
increase?
b) What was your one-year rate of return?
Related Book For
Bank Management and Financial Services
ISBN: 978-0078034671
9th edition
Authors: Peter Rose, Sylvia Hudgins
Posted Date: