If one yr later the marketplace interest rate increases

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Reference no: EM1322919

Q. "A 2 yr bond with 1000 face value also 10% coupon rate is sold for 1000 today. If one yr later the marketplace interest rate increases by 5%, then this bond will have a marketplace price of?

Now Assumes: A 3 yr bond with 1000 face value also 10% coupon rate is sold for 1000 today. If one yr later the marketplace interest rate increases by 5%, then this bond will have a marketplace price of?

Now if which buyer instead bought a 2 yr bond with 1000 face value also 10% coupon rate for 1000 today. If one yr later the marketplace interest rate increases by 5% also they sell the bond, this rate of return on this investment is?

Reference no: EM1322919

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