Question
NTR issue a bond in January 2014 in the UK that has coupon of 3% paid annually and the face value of $10,000. The face
NTR issue a bond in January 2014 in the UK that has coupon of 3% paid annually and the face value of $10,000. The face value is paid out in December 2019.
Required:
a.If the interest rate is 4% at the time of issue, determine the bond price.
b.If the interest rate reduces to 3% after one year, determine the total rate of return if you sell the bond at the market.
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Introduction to Finance Markets, Investments and Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
16th edition
1119398282, 978-1-119-3211, 1119321115, 978-1119398288
