Question
Consider the following two bonds: Bond A Term to maturity: 10 years from today Face value: $1,000 Annual Coupon rate: 6% Number of payments per
Consider the following two bonds: Bond A Term to maturity: 10 years from today
Face value: $1,000
Annual Coupon rate: 6%
Number of payments per year: 2
Bond B
Term to maturity: 20 years from today
Face value: $1,000
Annual Coupon rate: 9%
Number of payments per year: 2
Compute the price for each bond. The current YTM for each bond is 8%. Then make a table comparing the bond prices when the YTM varies from 1%, 2% 17%.
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Business Forecasting
Authors: John E. Hanke, Dean Wichern
9th edition
132301202, 978-0132301206
