Suppose in 2018 you buy 3% coupon rate, $100 face value bond for $100 that has 3

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Suppose in 2018 you buy 3% coupon rate, $100 face value bond for $100 that has 3 years left till

maturity. Suppose in 2019, when interest rates increase to 6%, you decide to sell it.

a) Calculate the selling price of your bond in 2019. How did its value change because of the interest rate

increase?

b) What was your one-year rate of return?

Related Book For answer-question

Bank Management and Financial Services

ISBN: 978-0078034671

9th edition

Authors: Peter Rose, Sylvia Hudgins

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Posted Date: Feb 24, 2024 12:48 AM

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Suppose in 2018 you buy 3% coupon rate, $100 face value bond for $100 that has 3

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Bank Management and Financial Services

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