If john owns a corporate bond with a coupon rate of 8 that, Ask an Expert

Management Studies

If John owns a corporate bond with a coupon rate of 8% that matures in 10 years and Bill owns a corporate bond with a coupon rate of 12% that matures in 25 years. If the interest rates go down does:

1. Johns bond decreases and Bill's bond increases

2. Both bonds increase

3. Bill's bond will decrease more than the value of John's bond because of the longer maturity time

4. Both bonds remain the same because they were purchased before interests rates changed

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Business Management, Management Studies

Category:- Business Management
Reference No.:- M998034

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