The goal is to create a table for the rates or return on bonds of varying maturities like the one in the notes for Chapter 4. The bond has a face value of $1000 and is bought at par with a coupon rate of x%. After one year, the market yield on the bond changes to y%.

On your table, show the current yield, the resale price P(t+1) the rate of capital gain and the rate of return for bonds is 1,2,3, 5 and 7 years to maturity.

g= rate of capital gain

ROR= Rate of return

Values for a bond bought at par with face value $1000, with yield to maturity of 7% initially, and 9% after 1 year. yrs to maturity initial curr yield initial P(t) P(t+1) g ROR 1 0.07 1000 1000.000 0.000 0.070 2 0.07 1000 | 3 0.07 1000 5 0.07 1000 7 0.07 1000 Values for a bond bought at par with face value $1000, with yield to maturity of 7% initially, and 9% after 1 year. yrs to maturity initial curr yield initial P(t) P(t+1) g ROR 1 0.07 1000 1000.000 0.000 0.070 2 0.07 1000 | 3 0.07 1000 5 0.07 1000 7 0.07 1000