suppose the current price of a premiumm bond with ten years

suppose the current price of a premiumm bond with ten years to maturity is $1125.07. which could not be the price of the premium bond six years from today assuming that the current YTM doesnt change over time? 1015 ? 1045? 1075? 1105? or 1135?

Solution

1135 is correct

we are given that bond with 10 years , price is 1125.07

so any time less than 10 years . price can no increase from 1125.07 ,9YTM is constant)

since 1135 > 1125.07 ,

this can not be price for bond after 6 years.

suppose the current price of a premiumm bond with ten years to maturity is $1125.07. which could not be the price of the premium bond six years from today assum

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