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You own a bond with a par value of $1000 that pays a $100 annual coupon

Finance

You own a bond with a par value of $1000 that pays a $100 annual coupon. The bond matures in 15 years. Your required rate of return is 12% p.a. 
(a) Calculate the value of the bond. (b) How does the value of the bond change if your required rate of return (i) increases to 15% p.a. or (ii) decreases to 8% p.a.? (c) Assume that the bond matured in 5 years instead of 15 years. Recompute your answers in part (b). 
 

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