Question
Please give the detailed calculation process thank you! 1. 3 years ago, you purchased 10 years , 8% coupon bond , and a YTM of
Please give the detailed calculation process thank you!
1. 3 years ago, you purchased 10 years , 8% coupon bond , and a YTM of 8%. The effective annual yield to maturity on the bond today is 10%. What is the value of the bond today if the coupon is paid annually? What is the value of the bond today if the coupon is paid semi-annually? Which bond should sell for a higher price? Why?
2. A 10-years bond can be called after 5 years. The Bond has a coupon rate of 8%, a face value of $1000, and a call price of $1,030. The Bond is currently selling for $1,010. What is the bond yield to call (YTC) and current yield?
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