What 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?
Answer to relevant QuestionsShould the Sampsons consider investing a portion of their savings in bonds to save for their children’s education? Why or why not? Why do investors invest in index funds? Discuss the popularity of index fund investment as it relates to expenses. What tax advantage do index funds offer relative to other types of mutual funds? What is a prospectus? How does an investor obtain one? What information does a prospectus provide? What kinds of expenses do mutual funds incur? How are expense ratios calculated? Why should investors pay attention to expense ratios? Ronnie owns 600 shares of a stock mutual fund. This year he received dividend distributions of 60 stock mutual fund shares ($ 40 per share) and long term capital gain distributions of 45 stock mutual fund shares ( also $ 40 ...
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