Hi there,

Could you please help my solve the problem below.

A.) The Fox Flooring Company Series A bonds have 5 years to maturity. Interest is paid annually; the bonds have a $1000 par value; and the coupon rate is 9%. (show your work)

• What is the yield to maturity at a current market price of $829?
• What is the yield to maturity at a market price of $1,104?
• Whatwouldyoupayforabondifyoubelievedthatappropriateyieldis12%?

B.) A bond dealer purchased the following bonds with a yield to maturity of 8%. Afterwards, yields fell to 7%. Complete the table below: (show your work)

Price at 8% Price at 7% Percentage Change

10 years, 10% coupon

10 years, Zero

5 years, Zero

30 years, Zero