You own 30-year Treasury Bonds that you bought exactly 6 years ago. At the time (you bought
Question:
You own 30-year Treasury Bonds that you bought exactly 6 years ago. At the time (you bought the TBonds when they were issued), the 30-year T-Bond yield was 3.75% APR (compounded semiannually). That yield was also the coupon rate used to compute the semi-annual coupon payments (the T-Bonds were issued exactly at par). The T-Bonds have a total face value of $50,000. You just received an interest payment, and the bonds will mature in exactly 24 years. Today’s yield for such a long-maturity T-Bond is 1.40% (APR, compounded semi-annually).
a. What is the current market value of your T-Bonds?
b. By what percentage has the value of your T-Bonds increased or decreased since you bought them?
Campbell Biology
ISBN: 978-0321775658
10th edition
Authors: Jane B. Reece, Lisa A. Urry, Michael L. Cain, Steven A. Wasserman, Peter V. Minorsky, Robert B. Jackson