Ahmad purchase a 10 year 8% coupon bond with the face value of $100. He wants to hold this bond for 1-year and

Question

If interest rate falls to 6% then suppose price increases to $109.16. What will be the capital gain after the price rise?

Answer 1

If you had paid attention in class, and read your textbook, maybe you'd be able to do your own homework.

Someone here might give you the answer, but won't be sitting beside you when you take your finals.

Answer 2

you're able to do it rather in Excel. that's the formulation. =PV(0.06,10,-10,-one hundred,0) 0.06 = activity fee 10 = quantity of sessions (years) -10 = coupon quantity -one hundred = face fee observe that coupon and face fee are detrimental numbers, that's by fact which you pay funds for the bond, and get carry of money from the bond. in case you do no longer lead them to detrimental, your modern fee will arise detrimental.