Question
XYZ has a $1000 Face Value 5% Coupon Bond (paid semi-annually). The bond is selling for $937.19 today and matures in 8 years. (The YTM
XYZ has a $1000 Face Value 5% Coupon Bond (paid semi-annually). The bond is selling for $937.19 today and matures in 8 years. (The YTM today is 6.0%)
a) What will be the price of the bond in 1 year (the bonds now have 7 years left until maturity) if the YTM investors demand in 1 year is still 6.0%?
b) What will be the price of the bond in 1 year (the bonds now have 7 years left until maturity) if the YTM investors demand in 1 year is 5.7%?
(Please show how)
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Essential Personal Finance A Practical Guide For Students
Authors: Lien Luu, Jonquil Lowe, Jason Butler, Tony Byrne
1st Edition
1138692956, 978-1138692954
