Carnival Cruise Lines decided to sell some new bonds (something about fixing a big ship).  They sold the bonds for $1,000 (face value) with a 20 year maturity and an 8% coupon.  Two years have passed.  Interest rates on similar bonds have declined to 5%.  If an owner attempts to sell her/his Carnival bond bought for $1,000 in 2013, what should they expect to receive for it in the secondary market?

Answer rating: 100% (QA)

They will sell it for approximately 1351 at a premium as shown below Given t... View the full answer