7.23.2005

Q&A: What's the reinvestment income of...

...the 2nd coupon payment of a 5-year, 8% $100 par bond when the reinvestment rate is 10%?

coupon FV - par = FV - 100*8%/2 = 5.9-4 = $1.9

  • With Excel FV function, Nper=8, Rate=10/2%,PV=100*8%/2, one gets FV=5.9

Category: C++ Quant > Debt > Valuation

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