Question
An 8%, five-year bond yields 6%. It pays semi-annual coupon payments and has a face value of 100. i.If this yield to maturity (YTM) remains
An 8%, five-year bond yields 6%. It pays semi-annual coupon payments and has a face value of 100.
i.If this yield to maturity (YTM) remains unchanged, calculate the expected price today and in one year's time.
ii.Calculate the total return to an investor who held the bond over the 1-year period.
Comment on the relationship between the bond return over a particular period and the YTM.
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International Financial Management
Authors: Geert Bekaert, Robert J. Hodrick
2nd edition
013299755X, 132162768, 9780132997553, 978-0132162760
