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Consider a bond with 5 years to maturity and one with 10 years to maturity. Both pay 5% coupons in one payment per year. Calculate
| Consider a bond with 5 years to maturity and one with 10 years to maturity. Both pay 5% coupons in one payment per year. | |||||||||||||||||
| Calculate the bond prices assuming the following yields to maturity. Plot the two relationships between bond prices and yields in one figure. Be sure to put bond prices on the vertical axis. | |||||||||||||||||
| Par=1000 | |||||||||||||||||
| Yield to Maturity | |||||||||||||||||
| 1% | 2% | 3% | 4% | 5% | 6% | 7% | 8% | 9% | 10% | 11% | 12% | 13% | 14% | 15% | |||
| Price of 5-year bond | |||||||||||||||||
| Price of 10-year bond | |||||||||||||||||
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Personal Finance QuickStart Guide
Authors: Morgen Rochard
1st Edition
1945051019, 978-1945051012
