Assume that you purchase a 30-year $1,000 par value bond, with a 10% coupon, and a yield of 9%. Immediately after you purchase the bond, yields change to 7% and remain at that level to maturity. Assume that you hold the bond for 8 years and then sell it. Interest is paid annually. What is the price of the bond after 8 years? Group of answer choices A. $1,338.17 B. $1,331.84 C. $1,285.17 D. $1,379.18 E. $1,461.00
Assume that you purchase a 30-year $1,000 par value bond, with a 10% coupon, and a yield of 9%. Immediately after you purchase the bond, yields change to 7% and remain at that level to maturity. Assume that you hold the bond for 8 years and then sell it. Interest is paid annually. What is the price of the bond after 8 years? Group of answer choices A. $1,338.17 B. $1,331.84 C. $1,285.17 D. $1,379.18 E. $1,461.00
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
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USE THE FOLLOWING INFORMATION FOR THE NEXT 3 QUESTIONS:
Part 2 of 3:
Assume that you purchase a 30-year $1,000 par
What is the price of the bond after 8 years?
Group of answer choices
A. $1,338.17
B. $1,331.84
C. $1,285.17
D. $1,379.18
E. $1,461.00
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