Emma Bond: Par value K1000, coupon rate 10%, maturity 10years, market rate for bond is15%. Find Value of the bond after 2 years 6 years 8 years….. at 15% -discount 9% -premium…… ??
Emma Bond: Par value K1000, coupon rate 10%, maturity 10years, market rate for bond is15%. Find Value of the bond after 2 years 6 years 8 years….. at 15% -discount 9% -premium…… ??
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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Question
Emma Bond: Par value K1000, coupon rate 10%, maturity 10years, market rate for bond is15%.
Find Value of the bond after
- 2 years
- 6 years
- 8 years….. at
- 15% -discount
- 9% -premium…… ??
Expert Solution
Introduction
The value of a bond can be determined by discounting the coupon and maturity amount. It is calculated to know the profitability of the bond. Valuation of bonds can be done by investors. An appropriate discount rate should be used to calculate the value of bonds.
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