2.1.4 Bonds and obligations: Exercise 12 Find the value on 15th January 2012 of a bond with a face value of €1,000 which pays annual coupons of €52 on every 15th December and a maturity date of 15th December 2021. Also, suppose that: 12.a) The required market yield on 15/Jan/12 is 5%; 12.b) The required market yield on 15/Jan/12 is 5.25%; 12.c) The required market yield on 15/Jan/12 is 5.5%. From your answers to sections a) to c), what can you say about the relationship between the price of the bond and the required yield?
2.1.4 Bonds and obligations: Exercise 12 Find the value on 15th January 2012 of a bond with a face value of €1,000 which pays annual coupons of €52 on every 15th December and a maturity date of 15th December 2021. Also, suppose that: 12.a) The required market yield on 15/Jan/12 is 5%; 12.b) The required market yield on 15/Jan/12 is 5.25%; 12.c) The required market yield on 15/Jan/12 is 5.5%. From your answers to sections a) to c), what can you say about the relationship between the price of the bond and the required yield?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:2.1.4 Bonds and obligations: Exercise 12
Find the value on 15th January 2012 of a bond with a face value of €1,000
which pays annual coupons of €52 on every 15th December and a
maturity date of 15th December 2021. Also, suppose that:
12.a) The required market yield on 15/Jan/12 is 5%;
12.b) The required market yield on 15/Jan/12 is 5.25%;
12.c) The required market yield on 15/Jan/12 is 5.5%.
From your answers to sections a) to c), what can you say about the
relationship between the price of the bond and the required yield?
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