Consider a simple bond has a coupon payment at the end of 1 year. The Face value of the bond is $1,000 and the stated interest rate on the bond is R=0.05 (5%) per year. If you buy this bond today, and then the interest rate on a newly issued bonds of this type goes up to R= 0.10 (10%) right after you buy yours, the most you could sell your bond for right now would be

a. $916.67

b. $900

c. 954.45

d. $909.09

e. $950

Answer rating: 100% (QA)

Face value 1000 coupon rate 5 005 coup... View the full answer