A Treasury bond has a coupon rate of 9%, a face value of
$1000
and matures 10 years from today. For a treasury bond the
interest
on the bond is paid in semi-annual installments. The current
riskless interest rate is 12% (compounded semi-annually).
1. Suppose you purchase the Treasury bond described above and
immediately thereafter the riskless interest rate falls to
8%.
(compounded semi-annually). What would be the new market
price of the bond?
2. What is your best estimate of what the price would be if
the
riskless interest rate was 9% (compounded semi-annually)?
A Treasury bond has a coupon rate of 9%, a face value of $1000 and matures 10 years from today. For a treasury bond the
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answerhappygod
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A Treasury bond has a coupon rate of 9%, a face value of $1000 and matures 10 years from today. For a treasury bond the
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