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2019: Canadian interest rates are 1% and the Canadian 10 year par value bond is issued with annual coupon of 1% with face value 1,000CAD.
2019: Canadian interest rates are 1% and the Canadian 10 year par value bond is issued with annual coupon of 1% with face value 1,000CAD.
2020: Canada decreased interest rates to 0.50% and bond yields followed perfectly.
2021: Canada keeps interest rates at 0.50% and issues a new 10 year par value bond with annual coupon of 0.50% with face value 1,000CAD.
What is the price of the 2019 Canadian Bond today, with 8 years left until maturity, such that its yield is equal to the 2020 bond yield?
1,039CAD
1,011 CAD
871 CAD
971 CAD
1,000CAD
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