Consider a coupon bond with a 7 coupon rate paid once a, Ask an Expert

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Consider a coupon bond with a 7% coupon rate paid once a year. The bond has 4 years to maturity and par value of 1000. Suppose that the interest rate today is 5%.

What is the future value of the bond assuming you will reinvest the coupons and will take the money only 4 years from now. Assume that the interest rate will stay 5% until the maturity time.

Bond value assuming this time assume that a month after you bought the bond the interest rate fell to 3% and it will stay 3% until the maturity time.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92786736

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