May 31, 2016

Homework Help: Finance (Coupon Bonds)

Posted by Kelly on Saturday, October 18, 2008 at 9:36pm.

I am having a hard time starting on how to calculate this please.

You purchased a $1,000 five percent coupon bond that matures in 10 years.

How much would your bond be worth if interest rates fall to 4% the day after you purchase the bond? What would the bond be worth in one year if interest rates fell to 4% at that point?

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