Assume a 100 face value of abond with a cupon rate of 4 yr


Question: Assume a $100 face value of abond with a cupon rate of 4%/ yr. and 8 years remainning to maturity. The prevailing interest rate is %10 .

(a) what is the price of the bond?

(b) Assume the bond is selling at $63. Whats the yield to maturity?

(c) does a change in interest rate have any effect on the bond price ? Explain what the effect is , if any , and why?

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Finance Basics: Assume a 100 face value of abond with a cupon rate of 4 yr
Reference No:- TGS02731202

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