ANna G.

asked • 10/16/21

British consol bonds were issued in 1927 to refinance Britain’s debt from the First World

British consol bonds were issued in 1927 to refinance Britain’s debt from the First World War. They were attractive investments to the working class because they paid 4% interest...forever! All those bonds have been purchased back by the government. However, imagine that today the U.K. were to issue new consol bonds that paid £50 per annum. What would such a bond be worth (in pounds), if long-term interest rates were estimated at 6%?

Mark M.

Do the bonds pay L50 or 6%? For what term? The statements are conflicting and ambiguous.
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10/18/21

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