Question
4-10: Two bonds offer a 5% coupon rate, paid annually, and sell at par ($1,000). One bond matures in two years and the other matures
4-10: Two bonds offer a 5% coupon rate, paid annually, and sell at par ($1,000). One bond matures in two years and the other matures in ten years.
a.What are the YTMs on each bond?
b.If the YTMs changes to 4%, then what happens to the price of each bond?
c.What happens if the YTM changes to 6%?
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Fundamentals of Investment Management
Authors: Geoffrey Hirt, Stanley Block
10th edition
0078034620, 978-0078034626
