Say that one day you buy a 20 year 100000 60 coupon rate, Ask an Expert

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Say that one day you buy a 20 year, $100,000, 6.0% (coupon rate) Treasury bond (for which you pay exactly $100,000). Eight years later, 12 year Treasuries are yielding 4%. What price would an efficient market put on your bond? (Note: Keep in mind that Treasury bonds actually pay interest semi-annually—and take that into consideration in arriving at your answer). Explain/show how you arrived at your answer.

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Financial Management, Finance

Category:- Financial Management
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