A plain vanilla bond has a maturity of 10 years, a par value of 100, and a
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A plain vanilla bond has a maturity of 10 years, a par value of £100, and a coupon rate of 9%. Interest payments are made annually. The market interest rate is assumed to be constant at 9%. The bond is issued and redeemed at par. The principal repayment the first year is closest to:
A. £0.00.
B. £6.58.
C. £10.00.
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A is correct A plain vanilla or bullet ...View the full answer
Answered By
Jehal Shah
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