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Suppose 10 years ago (in 2011) a bond was issued with a 20 year maturity (which means the bond will mature in 2031). At the
Suppose 10 years ago (in 2011) a bond was issued with a 20 year maturity (which means the bond will mature in 2031). At the issue date the bond was sold at par ( FV=$1,000) and carried a 6% coupon interest rate (i coupon = 0.06). Suppose at the current time, in 2021, the market interest rate for a bond of this risk and maturity is now 10% which means that r= 0.10%. What will be the market price of this bond today (2021); that is find PV
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