Nominal £100 bond - investor wants 12% return?
The government offers a 10-year nominal bond with a coupon of 10% (2 payments a year at 5%). Redemption can be either at par after 5 years or at £120 after 10 years. What price should an investor who wants a return of 12% p.a. compounded quarterly offer for the bond?
Thanks
The government offers a 10-year nominal bond with a coupon of 10% (2 payments a year at 5%). Redemption can be either at par after 5 years or at £120 after 10 years. What price should an investor who wants a return of 12% p.a. compounded quarterly offer for the bond?
Thanks