Suppose your required rate of return is 8%, and a bond has a coupon rate of 10%. Will the bond sell at a disco? - bond rate of return
Suppose your required return of 8% and a bond has a coupon rate of 10%. The bonds are sold at a discount or premium? What happens to bond prices on their lives?
Thursday, January 21, 2010
Bond Rate Of Return Suppose Your Required Rate Of Return Is 8%, And A Bond Has A Coupon Rate Of 10%. Will The Bond Sell At A Disco?
Subscribe to:
Post Comments (Atom)
1 comments:
Need a rate of return do anything with the discount / premium (if any) of the issuer of the load - probably more int dictated by the average rate over the market - If the sentence only 5% bonds, you pay a significant premium to the meeting the real return of 5%. On the market today - only junk bonds will probably get nowhere in the vicinity of 8%, this represents a massive risk - if you could lose everything
Post a Comment