Question
Q.1: Consider a coupon bond with a $1,000 face value and 30 years left until maturity. The coupon rate equals 6%. If the current yield
Q.1: Consider a coupon bond with a $1,000 face value and 30 years left until maturity. The coupon rate equals 6%. If the current yield to maturity of this bond is 8%, then the price of this bond is closest to: The Answer is 774.84 or 775.
Q.2: Consider a zero-coupon bond with the same characteristics as the coupon bond defined in the previous question (1). Assume that the YTM does not change between year 30 and year 29 before the bond's maturity date. The price change for the zero-coupon bond 30 years before maturity and 29 years before maturity lies closest to (consider the absolute value of the price differential)
Could someone help me with Question 2 please?
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