Tag: prices and interest rates
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Explain what is meant by direct vs indirect financing and the roles of financial intermediaries.
Question 7 a) If interest rates are 8%, what is the price of a 4-year bond with a face value of £100 and an annual coupon of 7%? (10 marks) b) If interest rates are 9%, what is the price of a 4-year bond with a face value of £100 and an annual coupon of…