Question
Suppose you purchase a 10-year bond with 6% annual coupons and $100 face value. You hold the bond for four years, and sell it immediately
Suppose you purchase a 10-year bond with 6% annual coupons and $100 face value. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5% when you purchased and sold the bond,
(a)What is the initial price of the bond when you buy it?
b) What is the price at which you sell the bond?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
978-1259024979
