Respuesta :
The bond price will be $1228.05 if it is paid semi-annually in which coupon payment is 5%, the yield for the bond is 3%, the bond's face value is 1,000, and matures in 19.
What is a bond?
- A bond is a bond that represents a loan made by an investor to a borrower (usually a company or government). A bond can be thought of as a promissory note.
- Between the lender and the borrower, it contains the details of the loan and its payment.
- Bonds are used by corporations, local governments, states, and sovereign governments to fund projects and operations.
- Bonds are owned by creditors or creditors of the issuer.
- The details of a bond include the termination date at which the principal of the loan is paid to the bondholder and typically include variable or fixed rate payment terms by the borrower.
- It is a unit of corporate bonds issued by a company and securitized as a tradable asset.
- bonds are called fixed-income securities because they traditionally pay a fixed interest rate (coupon) to the holder.
- Bond prices are inversely proportional to interest rates:
- When interest rates rise, bond prices fall, and vice versa.
- There are different types of bonds such as:
- government bonds
- zero coupon bonds
- corporate bonds
- municipal bonds
- agency bonds
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