Question

Source: Tommy Stubbington and Ben​ Edwards, open double quoteU.K. to Repay First World War ​Bonds,close double quote Wall Street Journal​, October​ 31, 2014. A few years ago the British government was considering​ retiring, or buying back from​ investors, some outstanding consols that had annual coupons of pound60. A consol​ is:

Answer 1

Answer:

Follows are the solution to this question:

Explanation:

Its console shall be coordinated effort mutual funds which do not grow at all, and in every year they create a corrected degree of interest, that's why Its bond paying a fixed rate of the coupon but not maturing.

$\text{Consolation price} =\frac{\text{Set amount of coupon}}{\text{Return Rate}}$

                            $= \frac{35}{2.5\%} \\\\ = \frac{35\times 100}{2.5} \\\\ = \frac{35\times 1000}{25} \\\\ = \frac{7\times 1000}{5} \\\\ = 7\times 200 \\\\= 1400$

It's the price that the government needs to offer shareholders.