Question
Jackson bought a 10-year, $1,000 PAR coupon bond today. Annual coupon rate is 11%. Coupons are paid 1 times in a year. Jackson was hoping
Jackson bought a 10-year, $1,000 PAR coupon bond today. Annual coupon rate is 11%.
Coupons are paid 1 times in a year.
Jackson was hoping for a yield to maturity (YTM) of 10% on this Bond.
Few hours after purchasing this bond, a very bad economic event occurred and all interest rates went down by 1%.
How much is Jackson's profit today? Enter your answer in the following format: 12.34 Hint: Compute the Bond PV before and after interest rate change, and take the difference. Answer is between 58.88 and 73.6
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Dave Ramseys Complete Guide To Money
Authors: Dave Ramsey
1st Edition
1937077209, 978-1937077204
