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Today is January 1. The interest rate is 8% and investors are convinced that it will stay at 8% for the next 10 years. A
Today is January 1. The interest rate is 8% and investors are convinced that it will stay at 8% for the next 10 years. A corporate bond comes on the market that for the next 7 years will pay $160 on December 31 to whoever owns the bond on that date. On January 1, 7 years from today, the issuer of the bond will redeem the bond by buying it back from the bondholder for $2,000. What should this bond sell for now
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