10. Bond pricina Understanding Bond Pricing Suppose your friend tells you that she recentiy purchasad a 10-year $10,000.00 bond with a €% coupon. A month later, she saw it quoted at 05.125, but she...

Extracted text: 10. Bond pricina Understanding Bond Pricing Suppose your friend tells you that she recentiy purchasad a 10-year $10,000.00 bond with a €% coupon. A month later, she saw it quoted at 05.125, but she does not know what this means. Yuu cai lell by Llhe way Llie burd is priced Uliel slie lies a Lurid, ulier wise i muld liave Leen priced You explain that the market price of her bond is now meaning it is now a bond. Based on the market price of the band you calculated, vou can tel that market interest rates have gone yield of the bond is row sirce the bond was issued. The current