(Question 2, p.348) Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount on interest of $800. Compute and enter in the spaces provided either the interest rate that the bond would yield to a bond buyer at each of the bond prices listed or the bond price at each of the interest yields shown. Bond Price Interest rate % $ ,000 8.9 10,000 11,000 6.2 From the completed table, we can generalize that the bond price and interest rate are (directly, inversely ) related.
(Question 2, p.348) Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount on interest of $800. Compute and enter in the spaces provided either the interest rate that the bond would yield to a bond buyer at each of the bond prices listed or the bond price at each of the interest yields shown. Bond Price Interest rate % $ ,000 8.9 10,000 11,000 6.2 From the completed table, we can generalize that the bond price and interest rate are (directly, inversely ) related.
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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Transcribed Image Text:5. (Question 2, p.348)_ Suppose a bond with no expiration date has a face value of $10,000 and annually
pays a fixed amount on interest of $800. Compute and enter in the spaces provided either the
interest rate that the bond would yield to a bond buyer at each of the bond prices listed or the
bond price at each of the interest yields shown.
Bond Price
Interest rate %
$ 8,000
8.9
10,000
11,000
6.2
From the completed table, we can generalize that the bond price and interest rate are ( directly,
inversely ) related.
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