Question
Your finanical advisor informed you that bonds are a good invesmtent option for you. Therefore, you invested in a bond that has a par value
Your finanical advisor informed you that bonds are a good invesmtent option for you. Therefore, you invested in a bond that has a par value of AED 1000 and pays interest with a coupon rate of 1%. The bond was issued with a maturity of 13 years. The yield to maturity of the bond is 18 %. However, recently the bond issuers has been doing well that resulted in an decrea in the risk and therefore, the required retum decreased by 1%. Given this change in the required return, what will be the percentage change in the price of the bond that you invested?
Plane prite treat a er in ture in Please ye t reave repe recal urianintens or there in nest question. As elaborate, what will be the effect
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