1 consider a 15 year bond with a face value 1000 pays 575, Ask an Expert

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1. Consider a 15 year bond with a face value $1000, pays 5.75% per year coupon semi annually and has a yield to maturity of 7.25%. How much would the price of bond change if interest rate in the economy increases by 0.25% per year?

2. If you expect to hold a stock for two years, predict that the yearly dividend will be $1 per year, and sell the stock for $110 two years later. The current market interest rate is 5% but you want to earn 7% annual return from this investment. What is the price you should pay for the stock?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92772384

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