The price of a bond that offers a safe promise of 100 in 1


The price of a bond that offers a safe promise of $100 in 1 year is $95. What is the implied interest rate? If the bond’s interest rate suddenly jumped up by 150 basis points, what would the bond price be? How much would an investor gain/lose if she held the bond while the interest rate jumped up by these 150 basis points?

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Financial Accounting: The price of a bond that offers a safe promise of 100 in 1
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