The following information relates to Problems
an investor purchases a nine-year, 7% annual coupon payment bond at a price equal to par
value. after the bond is purchased and before the first coupon is received, interest rates increase
to 8%. The investor sells the bond after five years. assume that interest rates remain unchanged
at 8% over the five-year holding period.
-Per 100 of par value, the future value of the reinvested coupon payments at the end of the holding period is closest to:
A) 35.00.
B) 40.26.
C) 41.07.