Calculate the Closing Price of This Bond

question 126

Short Answer

Calculate the closing price of this bond:
$$\begin{array} { | l | l | l | l | l | } \hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \\\hline \text { Action 11 \quad22 } & & 10 & 102 & + 1.25 \\\hline\end{array}$$

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Definitions:

Rational Investor

An individual who makes investment decisions based on logical analysis and evidence to achieve an optimum level of benefit or utility.

Interest Rate

The percentage portion of a loan assigned as interest to the borrower, usually specified as an annual percentage of the outstanding amount of the loan.

Asset

Anything of value owned by individuals or firms that can be used or sold to produce positive economic value.

Geometric Series

A series of numbers where each term after the first is found by multiplying the previous one by a fixed, non-zero number called the ratio.