Question
Consider a ten-year annuity and a perpetual bond. Assume that both securities pay an annual coupon of US$ 50, and that the annual yield is
Consider a ten-year annuity and a perpetual bond. Assume that both securities pay an annual coupon of US$ 50, and that the annual yield is 8%. Which of the two securities has the highest price?
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
