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non callable callable Coupon 3% 4% call price N.A 1100 If interest rate expected to fall,which bond will you choose.Explain

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Question

Finance

non callablecallable
Coupon3%4%
call priceN.A1100

If interest rate expected to fall,which bond will youchoose.Explain

Answer & Explanation Solved by verified expert
3.8 Ratings (697 Votes)
First let me explain the relationship between interest rates and coupon rate of the bond The coupon rate and Interest rates are inversely related This means in case interest rate is more than coupon rate    See Answer
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Transcribed Image Text

non callablecallableCoupon3%4%call priceN.A1100If interest rate expected to fall,which bond will youchoose.Explain

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