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Part 1

Suppose a

10-year,

$1,000

bond with a

7%

coupon rate and semiannual coupons is trading for a price of

$1,185.82.

a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?

b. If the bond's yield to maturity changes to

9%

APR, what will the bond's price be?

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Part 1

a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?

The YTM is

4.654.65%.

(Round to two decimal places.)

Part 2

b. If the bond's yield to maturity changes to

9%

APR, what will the bond's price be?

The price is

$enter your response here.

(Round to the nearest cent.)