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Question: Consider a bond which pays 7% and has 8 years to maturity. The market rate is 8% on bonds of this risk. What is this bond's price?

Consider a bond which pays 7% and has 8 years to maturity. The market rate is 6% on bonds of this risk. What is this bond's price?

Explain why there's difference in the price difference in questions 1 and 2 and why they move inversely.

What is the price of a 10 year $1000 bond that pays 3% interest if the current market yield is 2%?

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Category:- Basic Finance
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