You purchase AA rated 25-year bond with a $1000 face value, paying coupons at 2.00%, callable after 8 year for $1150 and putable after 8 years for 800.  

• Assuming the market rates are at 1.50% when you buy the bonds what price would you pay?

• 8 Years later the market rates shift to 0.75%, what would the bond be sold at?

Answer rating: 100% (QA)

To calculate the price you would pay for the AArated 25year bond with a 1000 face value paying coupo... View the full answer