Determine the selling price of your bond in 2022

Reference no: EM133426108

Question: Suppose you purchase a $1,000 face value coupon bond with a 5% coupon rate and 3 years remaining until maturity in 2022 for $1,000. Later, in 2023, you decide to sell the bond when interest rates have decreased to 3%. Determine the selling price of your bond in 2022 and explain how its value changed due to the increase in interest rates in 2023? What is your one-year rate of return?

Reference no: EM133426108

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