Question
Assume you buy a bond with the following features Bond maturity = 4 Coupon Rate = 6.00% Face Value = $1,000 Annual Coupons When you
Assume you buy a bond with the following features Bond maturity = 4 Coupon Rate = 6.00% Face Value = $1,000 Annual Coupons When you buy the bond the market interest rate = 6.00% Immediately after you buy the bond the interest rate changes to 7.00% What is the "reinvestment" effect in year 4 ?
Group of answer choices
-$3.92
$3.92
$4.04
-$4.04
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Financial Risk Manager Handbook
Authors: Philippe Jorion, Global Association Of Risk Professionals
5th Edition
0470479612, 978-0470479612
