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A 1. A 9% $1000 bond matures in 5 years and is selling at par. Find the yield to maturity (YTM) of the bond. 13]
A 1. A 9% $1000 bond matures in 5 years and is selling at par. Find the yield to maturity (YTM) of the bond. 13] 2. If the bond was selling at $900, should the YTM of the bond be more than or less than 9%? [3] B Terminator Bug Company bonds have a 14% coupon rate. Interest is paid semiannually. The bonds have a par value of $1,000 and will mature 10 years from now. 1. What is the coupon payment received by the investor on a semiannual basis? [3 Marks] 2. How much is the investor willing to pay for the bond? [8 Marks] 3. Is this a premium or a discount bond and why? [3 Marks]
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