A Bell Canada bond carries a coupon rate of 8%, payable semi-annually and has 9 years until maturity. It has a yield to maturity (YTM /yield rate) of 9 %.

a. What price does the bond sell?

b. What will the price be if the bond yield drops to 7%?

c. If Bell Canada incurred a considerable amount of debt what would happen to the price of the bond? Explain.

d. If Bell Canada incurred a considerable amount of debt what would happen to the coupon rate? Explain.

e. Give two reasons that could cause the yield rate to drop on a bond.

f. As a bond trader what is your strategy when purchasing bondswhat are you betting on?

g. What are bond covenants and what is their purpose?

h. If you bought a 10 year bond 10 years ago and it just matured, did changes in the yield rate over its term matter to you? Explain.