Should the government intervene in markets?
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Ответ:
$922.69
Explanation:
The price of the 3-year bond can be computed using the below bond price formula:
Price=face value/(1+r)^n+coupon*(1-(1+r)^-n)/r
face value is $1000
r is the new interest rate of 8%
n is the number of annual coupons the bond would pay which is 3
coupon=face value*coupon rate=$1000*5%=$50
price=1000/(1+8%)^3+50*(1-(1+8%)^-3)/8%
price of 3-year bond=$922.69