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Problem 1 : You are considering investing in a 10-year bond issued by NewEnergy Inc. This bond has $1000 face value, 4% coupon rate. The
Problem 1: | You are considering investing in a 10-year bond issued by NewEnergy Inc. This bond has $1000 face value, 4% coupon rate. | |||||||||
The bond pays coupons semi-annually and is currently selling at $920. The bond can be called at a $1,040 in 3 years. |
Draw a chart to show the relationship between bond yield and bond price.
Yield versu Price Data | |
Yield | Price |
0% | |
1% | |
2% | |
3% | |
4% | |
5% | |
6% | |
7% | |
8% | |
9% | |
10% | |
11% | |
12% | |
13% | |
14% | |
15% |
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