Question
1. A corporate bond A maturing in 30 years has a 5.2% coupon rate. It is selling at a face value. What is its yield
1. A corporate bond A maturing in 30 years has a 5.2% coupon rate. It is selling at a face value. What is its yield to maturity?
Yield to maturity %.
A corporate bond B maturing in 3 years has a 5.2% coupon rate. It is selling at a face value. What is its yield to maturity?
Yield to maturity %.
A similar corporate bond C maturing in 30 years has a 3.1% coupon rate. At what price should this bond sell if the required rate of return is the same for all bonds?
Price $ .
Because of sudden changes in the risk of these bonds, the required rate of return goes up to 7%. What are the prices of these bonds now?
Price of A $ ; Price of B $ ; Price of C $
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