Question
Bond pays a semiannual coupon at a rate of 10% per year when the market rate is 8% year. The bond has three years until
Bond pays a semiannual coupon at a rate of 10% per year when the market rate is 8% year. The bond has three years until maturity.
Find the bonds price today and 6 months from now (after next coupon)
What is the total 6-month return on the bond?
What is the total 6-month return if the market rate increases (unexpectedly) to 5% per half year immediately at the end of the 6-month period?
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Personal Finance
Authors: Jane King, Mary Carey
2nd Edition
0198748779, 9780198748779
