Question
A 5-year, 3% coupon ($30) paid semi-annually bond, with a face value of $1,000 and a yield-to-maturity of 3.5%. A 30-year, 3% coupon ($30) paid
A 5-year, 3% coupon ($30) paid semi-annually bond, with a face value of $1,000 and a yield-to-maturity of 3.5%.
A 30-year, 3% coupon ($30) paid semi-annually bond, with a face value of $1,000 and a yield-to-maturity of 4.5%.
Explain which bond has a lower price (present value), and why.
Explain how the coupon rate is different than the yield-to-maturity of a bond.
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Public Finance In Canada
Authors: Harvey S. Rosen, Wen, Snoddon
4th Canadian Edition
0070071837, 978-0070071834
