问题如下:
An investor purchases a nine-year, 7% annual coupon payment bond at a price equal to par value. After the bond is purchased and before the first coupon is received, interest rates increase to 8%. The investor sells the bond after five years. Assume that interest rates remain unchanged at 8% over the five-year holding period.
Per 100 of par value, the future value of the reinvested coupon payments at the end of the holding period is closest to:
选项:
A.35.00.
B.40.26.
C.41.07.
解释:
C is correct.
The future value of reinvested cash flows at 8% after five years is closest to 41.07per 100 of par value.
= 41.0662
The 6.07 difference between the sum of the coupon payments over the five-year holding period (35) and the future value of the reinvested coupons (41.07) represents the "interest-on interest" gain from compounding.
题目让求的是reinvest的FV,所以为什么不减掉5个coupon的价格,却直接用的是coupon和reinvest的FV总和呢