1.Consider a $1000 bond with a fixed-rate 10 per cent annual coupon rate and a maturity (N ) of 10 years. The bond currently is trading at a yield to maturity (YTM ) of 10 per cent.

Complete the table:

Use this information to verify the principles of interest rate–price relationships for fixed-rate financial assets. LO 6.4 The following questions and problems are based on material in Appendix 6B at the end of the chapter.

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Change N Coupon rate Yield to maturity Price $ change in price from par %change in price from par 8 10% 9% 6 10 9 10 10 9 10 10 10 10 10 11 11 10 11 12 10 11