R02 Bond pricing query
Just studying for R02, and I'm a bit confused about bonds!
The book says that if someone purchases a bond at a price of £98.53125 (assume this is the price for £100 nominal value?) and its price is now £136.69, the investor has made a capital loss of £36.69 for each £100.
I can't get my head around how they have made a loss if the price has increased? I thought they would have gained £36.69 + any interest as this wouldn't be included in the price?
Any help much appreciated!