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(Interest-rate risk) Reliant Energy has many bonds...




(Interest-rate risk) Reliant Energy has many bonds trading on the New York Stock Exchange. Suppose Reliant's bonds have identical coupon rates of 8.5% but that one issue matures in 3 years, one in 9 years, and the third in 12 years. If the yield to maturity for all three bonds is 8%, what is the fair price of each bond? Please show calculations. Thanks!


Paper#7103 | Written in 18-Jul-2015

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