Default risk: the chance that the issuer will not make the promised payments
Inflation risk: increase in interest rate will reduce the future value of the bonds returns
Interest rate risk: interest rate can change the price of the bonds. An increase in the interest rate will reduce the future value of the bond hence investors will suffer capital losses
Dana05 answered the question on July 18, 2019 at 19:29
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July 18, 2019
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July 18, 2019
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July 18, 2019
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July 18, 2019
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July 18, 2019
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July 18, 2019
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July 18, 2019
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July 15, 2019
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July 15, 2019
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July 15, 2019
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July 15, 2019
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A bond has a market price of 500 shillings. It promises to a coupon payment of 15% per annum at the end of each year...
(Solved)
A bond has a market price of 500 shillings. It promises to a coupon payment of 15% per annum at the end of each year for two years. If the face value of the bond is 1000. Find the current yield to maturity
Date posted:
July 15, 2019
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July 15, 2019
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July 15, 2019
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July 15, 2019
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July 15, 2019
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July 15, 2019
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July 15, 2019
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