Assume the coupon rate is 10% issue at par $1000 and for 15 years. Let say the market interest rate increase to 15% during the life of the bond. a) What is the interest payment for this bond annually b) What is the interest payment on semi-annually c) How much should the investors pay for this bondi.e. the value
Assume the coupon rate is 10% issue at par $1000 and for 15 years. Let say the market interest rate increase to 15% during the life of the bond. a) What is the interest payment for this bond annually b) What is the interest payment on semi-annually c) How much should the investors pay for this bondi.e. the value
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 4P
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Assume the coupon rate is 10% issue at par $1000 and for 15 years. Let say the market interest rate increase to 15% during the life of the bond.
a) What is the interest payment for this bond annually
b) What is the interest payment on semi-annually
c) How much should the investors pay for this bondi.e. the value
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