A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $980 and it is now selling for $1,010.a) What will be its selling price in two years if the market interest rates drop 1.9 percentage points? Type your answer here Round to the nearest cent. DO NOT INCLUDE COMMAS OR $.HintA) N=(15-2) x 2 because the question tells you that you are selling the bond 2 years from now which means you will be selling it with 13 years left to maturity.
A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $980 and it is now selling for $1,010.a) What will be its selling price in two years if the market interest rates drop 1.9 percentage points? Type your answer here Round to the nearest cent. DO NOT INCLUDE COMMAS OR $.HintA) N=(15-2) x 2 because the question tells you that you are selling the bond 2 years from now which means you will be selling it with 13 years left to maturity.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $980 and it is now selling for $1,010.
a) What will be its selling price in two years if the market interest rates drop 1.9 percentage points?
Type your answer here
Round to the nearest cent. DO NOT INCLUDE COMMAS OR $.
Hint
A) N=(15-2) x 2 because the question tells you that you are selling the bond 2 years from now which means you will be selling it with 13 years left to maturity.
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