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# would i go about calculating the market price of a 5 year bond with a face value of \$1000 and a 4% coupon rate if the market interest rate is also 4%?...

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How would i go about calculating the market price of a 5 year bond with a face value of \$1000 and a 4% coupon rate if the market interest rate is also 4%?

And what If I decided that the market rate increase to 5%, what is the new market price of the bond?

And last but not least If the market rate drops to 3%, what is the new market price of the bond?

#### Top Answer

The market price of a 5 year bond is \$1000 The... View the full answer

2 comments
• only thing i believe last one might just be 1046.11 instead of \$1045.80. Thanks for the assistance though! Appreciated
• lisamcharles
• May 13, 2018 at 3:48pm
• You are most welcome. Note: If the bond pays coupon semi-annually, then 1045.11 is correct.
• bfacenjoro
• May 13, 2018 at 4:00pm

#### Other Answers

Market Price of a 5 Year bond = \$1000 New... View the full answer

Bond Price is Calculated by Formula :-
C ' [1- I 1+r] “-n If r +Faee VAIueI [ 1+r]“ n C : Coupon 0.04‘1000 \$40 I : rate of Return 0.04 n: Years a At Market Rate 4% Bond Price = 340‘ [ 17 [...

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