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The price of a bond is calculated using the present value of future cash flows, which includes a coupon payment, C, a par value, Par,
The price of a bond is calculated using the present value of future cash flows, which includes a coupon payment, C, a par value, Par, number of periods until maturity, n, and a required rate of return, k. When considering the factors that affect bond prices, those that affect an individual required rate of return on the bond, k, are what cause the value of the bond to differ across investors. Mathematically, the general price movement of bonds can be modeled as which of the following? Pb=f(C,Par)Pb=f(n)Pb=f(k,Par)Pb=f(k)
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