Question
Assume the following information for an existing bond that provides annual coupon payments: Par value = $1,000 Coupon rate = 11% Maturity = 4 years
- Assume the following information for an existing bond that provides annual coupon payments:
Par value = $1,000
Coupon rate = 11%
Maturity = 4 years
Required rate of return by investors = 11%
the present value of the bond? 1,000
the required rate of return by investors were 14 percent instead of 11 percent, what would be the present value of the bond? 912,59
1. According to your answer in a & b what is the relationship between the interest rate and the value of the bond?
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Research In Finance
Authors: John W. Kensinger
1st Edition
0857245414, 978-0857245410
