> Suppose a $1,000 bond pays $50 per year in interest.?

Suppose a $1,000 bond pays $50 per year in interest.?

Suppose a $1,000 bond pays $50 per year in interest.?

Posted at： 2014-12-05　
a/. 5% (50/1000 x 100)

b/. $62.5%

Suppose a $1,000 bond pays $50 per year in interest.

(a) What is the contractual interest rate (“coupon rate”) on the bond?

(b) If market interest rates rise to 8 percent, what price will the bond sell for?
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