Question
A 11-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.75% (2.875% of face value every six months). The reported
A 11-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.75% (2.875% of face value every six months). The reported yield to maturity is 5.4% (a six-month discount rate of 5.4/2 = 2.7%).(Do not round intermediate calculations.Round your answers to 2 decimal places.)
a.What is the present value of the bond?
Present value____________$
b.If the yield to maturity changes to 1%, what will be the present value?
Present value_____________$
c.If the yield to maturity changes to 8%, what will be the present value?
Present value_____________$
d.If the yield to maturity changes to 15%, what will be the present value?
Present value____________$
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Financial Management For Decision Makers
Authors: Peter Atrill, Paul Hurley
2nd Canadian Edition
138011605, 978-0138011604
