Suppose a bond with no expiration date has a face value of $11,000 and annually pays a
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Question:
Suppose a bond with no expiration date has a face value of $11,000 and annually pays a fixed amount of interest of $650. Compute and enter in the spaces provided in the table below either the interest rate that the bond would yield to a bond buyer at each of the bond prices listed or the bond price at each of the interest yields shown.
Instructions: For bond prices, round to the nearest dollar. For interest rate, round your answer up to two decimal places.
Bond Price | Interest rate(s) % |
$ 9,000 | |
$ | 8.33 |
$11,000 | |
$11,000 | |
$ | 3.77 |
What generalization can be drawn from the completed table?
Related Book For
Economics
ISBN: 978-0073375694
18th edition
Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn
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