Rob buys a 30 year coupon bond with his $250,000 deposit at a time when the interest (coupon) rate is 3%.
Rob buys a 30 year coupon bond with his $250,000 deposit at a time when the interest (coupon) rate is 3%. In just under 3 years (so just before the 3rd coupon payment) he sells the bond to a neighbour. At that time the interest rate is 5%. How much is the bond’s approximate (within $50) competitive value at the time of sale?