Please Explain with steps. There are different methods for the same question, please give the...
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Please Explain with steps.
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Emma buys a bond with a face value of $100, a time to maturity of 5 years, a coupon of 2% pa with semi-annual payments and a yield of 2.4% pa. Three year's later (immediately after the sixth coupon has been paid), the Reserve Bank of Australia unexpectedly decreases the cash rate. The yield on Julies bond decreases to 1.2% pa and she decides to sell.
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Calculate the buying and selling prices. Discuss why the price has changed.
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