In: Finance
Use the bond term's below to answer the question
Maturity 6 years
Coupon Rate 3%
Face value $1,000
Annual Coupons
When you buy the bond the interest rate is 4%
Right after you buy the bond, the interest rate changes from 4.00%
to 2.75% and remains there.
What is the price effect in year 5 ?
$9.93
$13.22
$10.93
$12.57
$12.02