For calculating the book value of bond on 1 January 2011 , why don’t they consider the no.of years as 10 including 2011 and 2020? This is probably something simple but I just can’ get it.
Can anyone help with this one? Thanks
I missed this one too and can’t believe how stupid. You bought the bond at 2010, but you are trying to value it at the end of 2011. 2020 - 2011 = 9.
Isn’t the final coupon payment on Dec. 31 2020 counted?
Nine is the how many cpn payments there are from the end of 2011 to 2020 including the final.
Actually I apologize for confusing you. I have not answered your question. The TVM was to calculate the beginning BV of the year 2011 so there are 10 payments including the 2011 and the final payment. I have no idea why it’s 9. Error??
I know this is what confused me and that it should have been 10 and 9 respectively in the calculations.
Im stuck on this too.