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XYZ has a $1000 face value 5% coupon bond(paid semi-annually). The bond is selling for $1081.76f today and matures in 10 years. (The YTM today
XYZ has a $1000 face value 5% coupon bond(paid semi-annually). The bond is selling for $1081.76f today and matures in 10 years. (The YTM today is 4% compounded semiannually)
a)What will be the price of the bond in 4 years(the bonds now have 6 years left to maturity) if the YTM investors demand in 4 years is still 4% compounded semi-annually?
b)What will be the price of the bond in 4 years if the YTM investors demand in 4 year sis 3.5% compounded semi-annually?
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