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Use the following information to answer the questions. Bond A Bond B Face Value 1000 1000 Coupon rate 10% 8% Coupons paid out Semi-annually Quarterly
Use the following information to answer the questions.
|
| Bond A | Bond B |
| Face Value | 1000 | 1000 |
| Coupon rate | 10% | 8% |
| Coupons paid out | Semi-annually | Quarterly |
| Years to maturity | 4 | 4 |
| Bond price | 800 | ? |
Suppose bond A and B have the same YTM.
What is the yield to maturity of bond A?
What is the price of bond B?
What is the current yield of bond B?
What is the EAR (effective annual rate) of these two bonds?
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