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2. Bonds a. Suppose a 10-year, 1,000 face value bond with a 6% coupon rate and semiannual coupons is trading for a quoted price of

2. Bonds

a. Suppose a 10-year, 1,000 face value bond with a 6% coupon rate and semiannual coupons is trading for a quoted price of 107.79.(i) What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? (ii) If the bond's yield to maturity changes to 4% APR, what will the bond's price be?

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