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Assume bond with face value $1200, Coupon rate 2%, and 2% interest rate with 3 years to maturity. A- What is the fir value of
Assume bond with face value $1200, Coupon rate 2%, and 2% interest rate with 3 years to maturity. A- What is the fir value of this bond? B- If Joanna purchased this bond in 2019 and in 2021, she decided to sell it at interest rate 3%. Calculate the annual return. C- If she initiates the sale, what will be the capital gain or loss? D- What is your conclusion regarding the relationship between interest rate and price of bond?
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