A bond matures in seven years from today. It pays an annual return of €50 and at maturity it pays back its initial cost

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answerhappygod
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A bond matures in seven years from today. It pays an annual return of €50 and at maturity it pays back its initial cost

Post by answerhappygod »

A bond matures in seven years from today. It pays an annual
return of €50 and at maturity it pays back its initial cost of
€1,000. If your annual return expectation from such an investment
is 3¼% how much at a maximum are you prepared to pay now to buy the
bond?
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