Question
Consider a 5-year $10,000 corporate bond that pays $150 interest every six months (unlike the usual quarterly payment), until it finally matures (after five years)
Consider a 5-year $10,000 corporate bond that pays $150 interest every six months (unlike the usual quarterly payment), until it finally matures (after five years) and pays $10,150.
1.
Suppose that 3 years and 9 months have passed since the 5-year bond was issued. If the current yield on the bond is 6%, then the current market price of the bond (rounded to the nearest dollar) is $_____
2.
Fifteen months before maturity, the bond's market price is $9,877. Using numerical methods (i.e., trying different values for the yield), the yield on the bond, to the nearest tenth of a percent, is: ____
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