- The Value Of A Level Coupon Bond Is Given By The Formula Below A C 1 R 1 73 A Frittato R F 1 1 Show Th 1 (439.61 KiB) Viewed 47 times
The value of a level-coupon bond is given by the formula below: a C (1+r)*(1+73+-+ä frittato )r)? F + + (1+)(1+) Show th
-
answerhappygod
- Site Admin
- Posts: 899603
- Joined: Mon Aug 02, 2021 8:13 am
The value of a level-coupon bond is given by the formula below: a C (1+r)*(1+73+-+ä frittato )r)? F + + (1+)(1+) Show th
The value of a level-coupon bond is given by the formula below: a C (1+r)*(1+73+-+ä frittato )r)? F + + (1+)(1+) Show that this formula can be simplified to: PV =C v=c-ratalot 1 r(1 + r)? + (1 + r) Hence, calculate the value of a bond worth K10,000 that was bought at 5% level-coupon bond and is maturing in 18 years' time.