Attempts

Bond pricing

Understanding Bond Pricing

Suppose your friend tells you that she recently purchased a $15-$year $$10,000\mathrm{.}00$ bond with a $9\%$ coupon. A month later, she saw it quoted at $83$:$28,$

but she does not know what this means.

You can tell by the way the bond is priced that she has a U$.$S$.$ Treasury or agency grad bond; otherwise it would have been priced

explain that the market price of her bond is now

$,$ meaning it is now a

$"$ bond.

Based on the market price of the bond you calculated, you can tell that market interest rates have gone

since the bond was issued. The current

yield of the bond is now