2. Irving the investor just bought a $1,000 coupon bond from Netflix that makes a 4.8% coupon payment. The bond makes its coupon payments every 6 months and it matures in 10 years. If the interest rate in the economy is 4.5%, for how much money can Irving sell his bond (if he wanted to sell it)? Is he selling it at a discount or a premium?
Suppose that we all wake up tomorrow and price inflation is expected over the next 4 years. What will happen to the price on Irving’s bond as inflation sets in?! Get Finance homework help