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A GM and a Ford bond both have 4 years to maturity, a $1,000 par value, a BB rating and pay interest semiannually. GM has

A GM and a Ford bond both have 4 years to maturity, a $1,000 par value, a BB rating and pay interest semiannually. GM has a coupon rate of 6.8%, while Ford has a coupon rate of 6%.

Attempt 1/3 for 10 pts.

Part 1

The GM bond trades at 93.38 (percent of par). What is the yield to maturity (YTM)?

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Attempt 2/3 for 9 pts.

Part 2

What should be the price of the Ford bond (in $)?

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