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Exercise 1: A 14-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.00%. The reported yield to maturity is
Exercise 1: A 14-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.00%. The reported yield to maturity is 4.8% (a six-month discount rate of 4.8/2 = 2.4%). a. What is the present value of the bond? b. If the yield to maturity changes to 1%, what will be the present value? c. If the yield to maturity changes to 8%, what will be the present value? d. If the yield to maturity changes to 15%, what will be the present value?
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Financial Institutions Management A Risk Management Approach
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
8th edition
978-0078034800, 78034809, 978-0071051590
