Suppose you purchase a bond that has an 8,5% annual payment coupon. The bond has a par value of R1 000 and a maturity of 25 years, for R925. If the yield to maturity on the bond remains unchanged, what will be the price of the bond five years from now? 1. R 320,91 2. R 663,64 3. R 930,20 4. R1 953,15
Suppose you purchase a bond that has an 8,5% annual payment coupon. The bond has a par value of R1 000 and a maturity of 25 years, for R925. If the yield to maturity on the bond remains unchanged, what will be the price of the bond five years from now? 1. R 320,91 2. R 663,64 3. R 930,20 4. R1 953,15
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Suppose you purchase a bond that has an 8,5%
annual payment coupon. The bond has a par
value of R1 000 and a maturity of 25 years, for
R925. If the yield to maturity on the bond remains
unchanged, what will be the price of the bond five
years from now?
1.
R 320,91
2.
R 663,64
3.
R 930,20
4.
R1 953,15](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0be5c270-7856-4e43-843e-ba4a67a86d39%2F61d770b7-617f-4b00-8353-73b3e3a0da83%2Fv1glspu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose you purchase a bond that has an 8,5%
annual payment coupon. The bond has a par
value of R1 000 and a maturity of 25 years, for
R925. If the yield to maturity on the bond remains
unchanged, what will be the price of the bond five
years from now?
1.
R 320,91
2.
R 663,64
3.
R 930,20
4.
R1 953,15
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