Question
YIELD TO MATURITY AND FUTURE PRICE A bond has a $1,000 par value, 10 years to maturity, and a 7% annual coupon and sells for
YIELD TO MATURITY AND FUTURE PRICE
A bond has a $1,000 par value, 10 years to maturity, and a 7% annual coupon and sells for $985.
a. What is its yield to maturity (YTM)? Round your answer to two decimal places.
b. Assume that the yield to maturity remains constant for the next 2 years. What will the price be 2 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.
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Introduction To Mathematical Finance Discrete Time Models
Authors: Stanley R. Pliska
1st Edition
1557869456, 9781557869456
