Question
A bond with face value of $ 1,000 has annual coupons, promised coupon rate of 5%, and 5 years to maturity. Investors require an expected
A bond with face value of $1,000 has annual coupons, promised coupon rate of 5%, and 5 years to maturity. Investors require an expected return of 3% from this bond.
The probability of default is 3% per year and the loss given default is 60%.
(a) What is the yield-to-maturity of the bond?
(b) What is the price of the bond?
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Real Estate Finance And Investments
Authors: William Brueggeman, Jeffrey Fisher
17th Edition
1264072945, 978-1264072941
