AuthorTopic: Bond Yield
@2015-01-21 17:22:41
Could you please clarify the below statement.

6% 20 -year bond. If the yield investors require to buy this bond is 6%, the price of the bond would be 100. However, if the reqd yield increased to 6.5% the price of the bond would decline to 94.4479. Instead, the yield declines from 6% to 5.5%, the bonds price will rise by 6.02% to 106.0195..

How this is calculated..Is the intial 100$ is the par value or the initial price of the bond..Im missing something that causes this confusion..Any clarifications would be appreciated..


CFA Discussion Topic: Bond Yield

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Edward Liu

Edward Liu