Question
If a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm
If a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm this for both a premium and a discount bond using a 4-year 3.2 percent coupon bond with annual coupon payments and a face value of $1,000.
A. Assume the yield to maturity is 2.2 percent.
- Find the Bond Price today
- Find the bond price in one year
- Find the rate of return %
B. Assume the yield to maturity is 4.2 percent.
- Find the Bond Price today
- Find the bond price in one year
- Find the rate of return %
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
9781285586618
