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4. A bond maturing in 12 years has a coupon of 6% and a par value of $1,000. If you purchase the bond for $1,100.00
4. A bond maturing in 12 years has a coupon of 6% and a par value of $1,000. If you purchase the bond for $1,100.00 : a. What is your current yield? b. What is your yield to maturity? 5. You are considering the purchase of several bonds and are concerned about the sensitivity of the bonds in what you believe will be a volatile marketplace for several years. a. If two bonds being considered each have a coupon of 9% but one matures in 10 years and one in 5 years, which will be more sensitive to changes in interest rates? b. If two bonds being considered each have a maturity of 15 years but one has a coupon of 9% while the other has a coupon of 6%, which will be more sensitive to changes in interest rates? 6. Consider a $1,000 par value bond, with no maturity. If the bond is priced to yield 5%, what is the bond's price if it has a 7% coupon rate
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