Question: 25 today t0 an investor purchased a 20 year bond...
Question details
25. Today (T=0), an investor purchased a 20 year bond with a 5.00% coupon and a face value of $100,000 for $106,550. In six months (T=0.5) interest rates have decreased by 0.50% and the investor decides to sell the bond immediately after receiving the first coupon payment. What is the investor’s total gain (loss) on the bond? HINT: Total Gain (Loss) = Price Change in Bond + Coupon
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($6,548)
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($6,048)
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$7,130
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$7,602
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$7,630
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