Question
A 25-year, $1,000 par value bond has an 8.5% annual payment coupon.The bond currently sells for $925.If the yield to maturity remains at its current
A 25-year, $1,000 par value bond has an 8.5% annual payment coupon.The bond currently sells for $925.If the yield to maturity remains at its current rate, what will the price be 5 years from now?
Hint:
- solve the rate (yield to maturity) for the 25-year bond.
- with the same yield to maturity, solve the price for the bond with shorter maturity.
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International Financial Management
Authors: Cheol Eun, Bruce G. Resnick
8th edition
125971778X, 978-1259717789
