Question
In 2019, you purchased a 15-year $1,000 corporate bond with a coupon interest rate of 5%. For simplicity, we assume that the interest is paid
In 2019, you purchased a 15-year $1,000 corporate bond with a coupon interest rate of 5%. For simplicity, we assume that the interest is paid annually. Also assume new corporate bond issues of comparable quality are currently paying 4.50 percent.
- What is the approximate dollar price for which you could sell your bond?
- In your own words, describe why your bond increased in value.
Answer:
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How To Understand Business Finance
Authors: Bob Cinnamon, Brian Helweg-Larsen
2nd Edition
0749460202, 978-0749460204
