An investor purchases a Tesla bond for $1,200 ($1,000 principal, paid semi-annually, maturity of 6 years, 6.5%

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An investor purchases a Tesla bond for $1,200 ($1,000 principal, paid semi-annually, maturity of 6 years, 6.5% coupon rate). What is the new price of the bond if the yield-to-maturity of the bond goes down 1.0%? Still assume 6 years until maturity.

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Investments An Introduction

ISBN: 978-0324561388

9th Edition

Authors: Herbert B Mayo

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Posted Date: Dec 12, 2023 02:14 AM

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An investor purchases a Tesla bond for $1,200 ($1,000 principal, paid semi-annually, maturity of 6 years, 6.5%

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The price of a bond can be calculated using the formula P C 1 1 rn r FV 1 rn Where P price of the bo... View the full answer

Investments An Introduction

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