Factors that affect bond pricing

STEP: $1$ of $3$

The price of a bond is calculated using the present value of future cash flows, which includes a coupon payment, $C,$ a par value, Par, number of periods until maturity, $n,$ and a required rate of return, $k.$ When considering the factors that affect bond prices, those that affect an individual's required rate of return on the bond, $k,$ are what cause the value of the bond to differ across investors.

Mathematically, the general price movement of bonds can be modeled as which of the following?

$P_b=f(k,C,Par)$

$P_b=f(k)$

$P_b=f(k,Par)$

$P_b=f(k,C)$

TOTAL SCORE: $\frac{0}{5}$

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