Question
Bond prices and yieldsAssume that the Financial Management Corporation's $1, 000-par-value bond has a 7.200 % coupon, matures on May 15, 2023, has a current
Bond prices and yieldsAssume that the Financial Management Corporation's $1, 000-par-value bond has a 7.200 %
coupon, matures on May 15, 2023, has a current price quote of 97.566 and a yield to maturity (YTM) of 8.021 %
. Given this information, answer the following questions:
a.What is the dollar price of the bond?
b.What is the bond's current yield?
c.Is the bond selling at par, at a discount, or at a premium? Why?
d.Compare the bond's current yield calculated in part b to its YTM and explain why they differ.
a.The dollar price of the bond is $______
(Round to the nearest cent.)
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