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show work for all answers F) What is the yield to maturity on a 10-year, 9%, annual coupon, $1000 par value bond that sells for
show work for all answers F) What is the yield to maturity on a 10-year, 9%, annual coupon, $1000 par value bond that sells for $887.00? That sells for $1,134.20? What does the fact that it sells at a discount or at a premium tell you about the relationship between rd and the coupon rate? What are the total return, the current yield, and the capital gains yield for the discount bond? Assume that it is held to maturity and the co doesn not default? J) Suppose for $1,000 you could buy a 10%, 10-year annual payment bond or a 10%, 10 year semiannual payment bond. They are equally risky. Which would you prefer? If $1,000 is the price for the semiannual bond, what is the equilibrium price for the annual payment bond? K) Suppose a 10 year,10% semiannual coupon bond with a par value of $1000 is currently selling for $1,135.90, producing a nominal yield to maturity of 8%. However it can be called after 4 years for $1,050. 1. What is the bonds nomimal yield to call (YTC)? 2. If you bought this bond, would you be more likely to earn the YTM or the YTC? why
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