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You are considering the following corporate bond: Par value $1,000 Coupon rate 8% Time to maturity 4 years Yield to maturity 6% What is the
- You are considering the following corporate bond:
| Par value | $1,000 |
| Coupon rate | 8% |
| Time to maturity | 4 years |
| Yield to maturity | 6% |
- What is the current bond price if the coupons are paid semi-annually? (3 marks)
- Is the bond a discount or premium bond? Explain. (2 marks)
- Calculate its current yield. (2 marks)
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