Question
A coupon bond that pays interest semi-annually has a par value of $1,000, matures in eight years, has a yield to maturity of 8.5%. The
A coupon bond that pays interest semi-annually has a par value of $1,000, matures in eight years, has a yield to maturity of 8.5%. The coupon rate is 9.5%.
a. Calculate the current trading price of the bond.
b. Calculate the current yield of the bond
c. After one year, if the yield to maturity in the market now is 9.3%, calculate the bond price and current yield at that time.
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
