Assistance needed urgently
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?
The market price of a 5 year bond is $1000 The... View the full answer
- only thing i believe last one might just be 1046.11 instead of $1045.80. Thanks for the assistance though! Appreciated
- May 13, 2018 at 3:48pm
- You are most welcome. Note: If the bond pays coupon semi-annually, then 1045.11 is correct.
- May 13, 2018 at 4:00pm