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A speculator is thinking that because of anticipated decreases in interest rates the ATT bond should be selling for $1100 four years from now (at
| A speculator is thinking that because of anticipated decreases in interest rates the ATT bond should be selling for $1100 four years from now (at T4). This $1000 par bond carries 6% coupon rate (payments made semi-annually). Further, because of capital gains, one could make 18% return (annualized expressed with semiannual comp., APR2). At what price do you have to buy the bond to get that return? | ||||||||
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Short Term Financial Management
Authors: Ned C. Hill, William L. Sartoris
3rd Edition
0023548320, 978-0023548321
