Question

D Question 12 1 pts Three years ago, you invested $100,000 in the UST 4 (SA) 10yr at par. Today, three years later, this is a 7yr bond. Using the now prevailing 7yr UST yield. What is your investment worth today, in $?

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Assuming required rate is also UST 4 (SA).

If there is difference between interest rate and coupon rate, bond prices will change from par value to another value. Here, coupon rate and interest rate are same. So bond price will remain at $100,000 only.

Hence, Investment worth today is $100,000.

Add a comment
Know the answer?
Add Answer to:
D Question 12 1 pts Three years ago, you invested $100,000 in the UST 4 (SA)...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT