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Consider the following bond: Face value = 1000; coupon rate = 8%; maturity = 5 years; ytm = 7% A) What is the value of

Consider the following bond: Face value = 1000; coupon rate = 8%; maturity = 5 years; ytm = 7%

A) What is the value of the bond today and in 2 years?

b) what are the current yield and capital gains yield for this bond this year and in two years?

c) Assuming interest rates remain the same over this bond's lifetime, what is going to happen to the value of this bond as time goes by?

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