Question
1. A bond pays $100 in one year. There are no coupon payments. a. The yield to maturity is 5%. What is the price of
1. A bond pays $100 in one year. There are no coupon payments.
a. The yield to maturity is 5%. What is the price of the bond?
b. If the yield to maturity increases to 6%, what is the revised price?
c. A bond pays $100 in one year. There are no coupon payments.
2. The price is $97. What is the yield to maturity?
a. If the price increases to $98, what is the revised yield to maturity?
b. What is the intuition for the connection between yields and prices?
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The Routledge Handbook Of Financial Literacy
Authors: Gianni Nicolini, Brenda J. Cude
1st Edition
0367457776, 978-0367457778
