Bond pricing

Understanding Bond Pricing

Suppose your friend tells you that she recently purchased a $20-$year $$8,000\mathrm{.}00$ bond with a $6\%$ coupon. A month later, she saw it quoted at $103\mathrm{.}375,$ but she does not know what this means.

You can tell by the way the bond is priced that she has a $$ bond; otherwise it would have been priced $$ You explain that the market price of her bond is now $,$ meaning it is now a $$ bond.

Based on the market price of the bond you calculated, you can tell that market interest rates have gone $q,$ since the bond was issued. The current yield of the bond is now $$