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A bond has a face value of $ 1,000 and has 10 years until maturity, carries a coupon rate of 7%, and sells for $
A bond has a face value of $ 1,000 and has 10 years until maturity, carries a coupon rate of 7%, and sells for $ 1,170. Interest is paid annually. (A) if the bond has a yield to maturity of 9%, 1 year from now. What will it price be at that time?
(B). What will be the annual rate of return on the bond?
(C). If the inflation rate during the year is 3%, what is the annual real rate of return on the bond? (Assume annual interest payments).
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