Question
1. Bond A has the following features: Face value = $1,000, Coupon Rate = 3%, Maturity = 9 years, Yearly coupons The market interest rate
1.
Bond A has the following features:
Face value = $1,000,
Coupon Rate = 3%,
Maturity = 9 years, Yearly coupons
The market interest rate is 5.68%
What is the current yield for bond A from today to year 1?
Calculate your answer to 2 decimal places (e.g., 5.23)
2.
Bond A has the following features:
Face value = $1,000,
Coupon Rate = 8%,
Maturity = 4 years, Yearly coupons
The market interest rate is 4.44%
If interest rates remain at 4.44%, what is the percentage capital gain or loss on bond A if you sell the bond in year 1?
State your answer to 2 decimal places (e.g., 3.56, 0.29)
If there is a capital loss make sure to include a negative sign in your answer (e.g., -0.23)
3.
Bond A has the following features:
Face value = $1,000,
Coupon Rate = 7%,
Maturity = 9 years, Yearly coupons
The market interest rate is 4.58%
If interest rates remain at 4.58%, what will the price of bond A be in year 1?
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