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What is the current rate of interest

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Reference no: EM131923177

Problem

Taking a bond with no fixed redemption date paying interest at the rate of 5 per cent pa and a nominal price of .C100-.

(a) What is the current rate of interest if the bond has a current market value of £110?

(b) What would be your answer if the cur-rent market price of the bond was £90?

(c) What would be the market price of the bond if the current market rate of interest is 5 per cent?

Reference no: EM131923177

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