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If the bond price increases maturity will also increases and vice versa. True False You purchase a 8-year bond at $97 per $100 par value
If the bond price increases maturity will also increases and vice versa. True False
You purchase a 8-year bond at $97 per $100 par value that pays a 7.6% coupon per annum. Further assume that bond pays coupon semi-annually, and coupons can be reinvested at 4.1% semi-annually for first 6 years. The yield to maturity of a 2-years comparable bond after 6 years is 6%. If you hold the bond for 6 years, what will be your total return?
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