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A bond is offered with face value of Rs 1000.00, a 5% coupon rate with annual rate with annual payments , and twenty years to maturity . If the...

A bond is offered with face value of Rs 1000.00, a 5% coupon rate with annual rate with annual payments , and twenty years to maturity . If the market interest rate is 12%, what should be the price . If the market interest rate rises to 15% , what will be the new price of the bond ? If the market interest rate drops to 9% instead , what will be the new price for the bond ? 

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Price =(c*Pvifa) +f/(1+r)^n =(50*(((1-(1.12^-20))/0.12)))+(1000/(1.12^20))=477.14... View the full answer

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