RX Technical
Coupon rate is 4, yield is 8, it matures in 5 years. Using no math what is the price of the bond?
Coupon rate is 4, yield is 8, it matures in 5 years. Using no math what is the price of the bond?
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At a deep discount. $40 is 8% of 600?
Something like 82-84? Roughly equivalent to extra 4 dollar a year for 5 years to get to par with some minor discounting
84
Using literally no math? I would guess the answer the interviewer is looking for is that it’s trading at a deep discount and then a number that’s in the general vicinity.
Other than that, any answer requires at least a little math.
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