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please explain and also show work. 2. You own a bond that is currently quoted at 97, has a face of $1,000, a coupon of
please explain and also show work.
2. You own a bond that is currently quoted at 97, has a face of $1,000, a coupon of 6% and matures in 10 years. You are considering selling the bond.
A. Should you sell it if your discount rate is 7%? Explain.
B. Suppose the bond is quoted at 89. Should you sell it? Explain.
C. What is the lowest price for which you would sell the bond? Explain.
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