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A bond pays $30 each quarter for 5 years (first payment within a quarter) and a final payment of $1000. If the interest rate is
A bond pays $30 each quarter for 5 years (first payment within a quarter) and a final payment of $1000. If the interest rate is 10% compoundable quarterly. A. What is its price today? in 1,2,3,.20 quarters immediately after making the corresponding coupon payment. Draw the price path of the bond. B. Suppose I buy the bond of exercise 1 today and sell it next quarter after collecting its first coupon, and the interest rate has fallen from 10% to 8% compoundable quarterly. What percentage gain did I make on this transaction? Include all expenses and all profits. Here by profit rate, I mean 1-hr, of course. A bond pays $30 each quarter for 5 years (first payment within a quarter) and a final payment of $1000. If the interest rate is 10% compoundable quarterly. A. What is its price today? in 1,2,3,.20 quarters immediately after making the corresponding coupon payment. Draw the price path of the bond. B. Suppose I buy the bond of exercise 1 today and sell it next quarter after collecting its first coupon, and the interest rate has fallen from 10% to 8% compoundable quarterly. What percentage gain did I make on this transaction? Include all expenses and all profits. Here by profit rate, I mean 1-hr, of course
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