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A $1,000 bond has a coupon of 8 percent and matures after eight years. Assume that the bond pays interest annually. a. What would be
A $1,000 bond has a coupon of 8 percent and matures after eight years. Assume that the bond pays interest annually. a. What would be the bond's price if comparable debt yields 9 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ b. What would be the price if comparable debt yields 9 percent and the bond matures after four years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ -Select- than the principal payment of the bond c. Why are the prices different in a and b? The price of the bond in a is -Select- v than the price of the bond in b as the principal payment of the bond in a is in b (in time). d. What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places. The bond matures after eight years: CY: % YTM: % The bond matures after four years: CY: % YTM: %
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