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Exactly 3 years ago, you purchased at par a 11-year, 10 percent semi-annual coupon bond, with a face value of $1000. Today, the market rate
- Exactly 3 years ago, you purchased at par a 11-year, 10 percent semi-annual coupon bond, with a face value of $1000. Today, the market rate of interest is 6%.
- What was the interest rate (discount rate) at the time you purchased thebond?
- Suppose you wish to sell the bond today, how much can you sell if for?
- What is your rate of return on the bond if all coupons were reinvested in an account, which pays 2% interest per year until the bond is sold 2 years after owning it?
- What was the interest rate (discount rate) at the time you purchased thebond?
- Suppose you wish to sell the bond today, how much can you sell if for?
- What is your rate of return on the bond if all coupons were reinvested in an account, which pays 2% interest per year until the bond is sold 2 years after owning it?
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