Question
1. A year ago, an investor purchased bonds in General Electric at par. The bond had a coupon of 8% at the date of issue.
1. A year ago, an investor purchased bonds in General Electric at par. The bond had a coupon of 8% at the date of issue. The bond declined over the course of the year to 94. What is the current yield on the bond? Answer is 8.51%
2. XYZ Inc. has some bonds outstanding, currently with 10 years remaining to maturity. The coupon rate is 8%, and the interest is paid semi-annually. The face value of the bonds is $100. What is the present value of the interest coupon stream if the yield to maturity is 10%? Answer is 87.53
show work for both preferably for financial calculator please
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