Question: Consider a bond such that: It has a nominal value of 1,000 euros Pay an annual coupon of 70 euros (7% of the nominal) It
Consider a bond such that:
It has a nominal value of 1,000 euros
Pay an annual coupon of 70 euros (7% of the nominal)
It is amortized over 5 years for 1,000 euros (that is, at par, that is, at its Nominal Value)
\The interest rate or return for bonds with a similar term and risk is 5% per year.
Choosing all that apply
A. The value of this bond (that is, its estimated price) today would be 1,086.59 euros
B. If the bond had a price of 1,086.59 euros today, its IRR would be 4.3%
C. If the price of the bond today were 1,200 euros, its IRR would be 2.52%
D. If the IRR of the bond were 2.67%, the price today should be 1,200.18 euros
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