Question
1. A semiannually compounded bond has a yield to maturity of 6%, a coupon rate of 8.50%, and a par value of $1,000. If the
1. A semiannually compounded bond has a yield to maturity of 6%, a coupon rate of 8.50%, and a par value of $1,000. If the bond matures in 8 years, it should sell for a price of ________ today. Round to the nearest 0.01.
2. An annually compounded coupon bond that pays interest of $60 has a par value of $1,000, matures in 7 years, and is selling today at an $84.52 discount from par value. The yield to maturity on this bond is ___________. Round to the nearest 0.01, in percentage terms.
3. A semiannually compounded, zero-coupon bond has a yield to maturity of 3% and a par value of $1,000. If the bond matures in 16 years, it should sell for a price of ________ today. Round to the nearest 0.01.
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