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Consider three bonds, A, B and C, each paying 7% semiannual coupons, and with face value of US$1,000. For each bond, use the Excel PRICE

Consider three bonds, A, B and C, each paying 7% semiannual coupons, and with face value of US$1,000. For each bond, use the Excel PRICE function to calculate the price when the YTM ranges from 1% to 20%. Observe the graph that is generated at the bottom of the worksheet.

What can you say about the relationship between the bond price and the YTM?

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