One of the financial assets that is affected by the changes in the rate of...

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Accounting

One of the financial assets that is affected by the changes in the rate of interest is the fixed interest bond traded in capital markes.
1) Explan the effects of increasing prices on the value of the bond (4 mks)
2) If the face value of a two year bond is kshs 10,000 with a coupon rate of interest of 5%p-a.calculate the buying price of the bond.
3)What would be the real value of the bond given in 2) if the rate of inflation has risen by 2%(2mks)
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