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There are four bonds ( A , B , C and D ) with diffefrent charateristics as follws. table [ [ Bond , Price,Coupon
There are four bonds A B C and D with diffefrent charateristics as follws.
tableBondPrice,Coupon rate,tableTimetomaturitytableYieldtomaturity years, years,C years, years,Answer the following questions in the specific order the numbers in the,,,,
Answer the following questions in the specific order the numbers in the parentheses are the points for each of the quesitons:
Calculate the price value for each of the bonds, assuming the coupons are paid annually.
Which bonds are premium bonds? Which bonds are discount bonds?
Are you able to figure out which would be premium, and which would be discount, bonds without any calculation? Explain why or why not.
Compare Bonds A and : which bond's price will change more if the market interest rate changes? Why? Hint: You do not need to do any calculation to answer question
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