Question
in year 1, the par value bond is $1000, the annual coupon rate is 3.5%, and the bond is currently trading at $1500.75. In year
in year 1, the par value bond is $1000, the annual coupon rate is 3.5%, and the bond is currently trading at $1500.75. In year 2, the 6.5% annual coupon and Par Value bond is $1389 to mature in 9 years, and similar bonds are currently yielding 8.75%.In year 3, the same parameters as year 2, only similar bonds are yielding 9.5%. For year 4, it is a $1590 par value bond maturing in 9 years. Similar bonds are yielding 3.2%. Please show how calculations were completed.
Year 1: What is the current market yield for your bond with the indicated annual coupon rate and maturity?
Year 2: What is the Present Value of the annual coupon, par value bond to maturity?
Year 3: What is the Present Value of a bond using the same data you are given in Year 2, but with the similar bond yield provided?
Year 4: What is the Present Value of the zero-coupon bond to maturity?
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