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Three years ago, ABC company issued 10 year bonds that pay 5% semiannually, Assume that the bond has a $1000 par value . (i) if
Three years ago, ABC company issued 10 year bonds that pay 5% semiannually, Assume that the bond has a $1000 par value .
(i) if the bond currently sells for $1,045 , what is the yeild to maturity (YTM) on this bond? (ii) If you are expecting the interest rate to drop in the near future and you want to gain profit by speculating on a bondm will you buy or sell this bond? Explain.
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