Question
An investor buys a $1,000, 20 year, 8 percent (interest paid annually) bond at par. After five (5) years have passed, interest rates are now
An investor buys a $1,000, 20 year, 8 percent (interest paid annually) bond at par.
After five (5) years have passed, interest rates are now 10 percent.
(1) How much can you sell the bond for now (after 5 years)?
(2) How much would the investor LOSE if they sell the bond now?
IF YOU USED A FINANCIAL CALCULATOR OR EXCEL, LIST THE INPUTS YOU USED.
SHOW ALL YOUR CALCULATIONS TO GET FULL CREDIT.
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Remittances And International Development
Authors: Sabith Khan, Daisha Merritt
1st Edition
0367521881, 978-0367521882
