Suppose that in 2018 your grandmothergifted you a 30 year US Treasury bond whichshe had bought newly issued in 2010. Thisbond has a face value of $10,000 and pays4% coupon every December. This bond willmature in 2040 December. You held thatbond and earned coupon payments for twoyears but in January 2020 you sold this bondin the secondary market. If the market interestrate was 2% at that time, what price did youget for that bond?

The price of a bond is the summation of the coupon amount till maturity and face value at the time…

Answered: rate was 2% at that time, what price…

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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rate was 2% at that time, what price did you get for that bond?