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A company issued a 10-year bond three years ago at a coupon rate of 6.5%. The payments are semi-annual and the current price of the
A company issued a 10-year bond three years ago at a coupon rate of 6.5%. The payments are semi-annual and the current price of the bond is $1115. a) What is the bond's yield to maturity? (4 marks) b) What would happen to the coupon rate if the Bank of Canada increased interest rates tomorrow? (3 marks) c) If the Bank of Canada increases interest rates by 1% tomorrow, what will be the next coupon payment on this bond? (1 mark)
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