1) Suppose you purchased a 20-year bond four years ago at par. The bond pays...
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Suppose you purchased a year bond four years ago at par. The bond pays annual interest, has a par value of $ and a coupon rate of Today, the bond has years to maturity, the market rate of interest is and you are considering selling the bond. a What was the market rate of interest at the time you purchased the bond? Mark b Suppose you wish to sell the bond today; how much should you sell the bond for? marks c What is the current yield of the bond today? marks
Suppose you purchased a year bond four years ago at par. The bond pays annual interest, has a par value of $ and a coupon rate of Today, the bond has years to maturity, the market rate of interest is and you are considering selling the bond.
a What was the market rate of interest at the time you purchased the bond? Mark
b Suppose you wish to sell the bond today; how much should you sell the bond for? marks
c What is the current yield of the bond today? marks
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