Question
You have bought a bond which carries a coupon rate of 8 percent, has 7 years until maturity, and sells at a yield to maturity
You have bought a bond which carries a coupon rate of 8 percent, has 7 years until maturity, and sells at a yield to maturity of 7 percent.
Show your calculations and answer the following questions
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What coupons do bondholders receive each year?
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What is the price that you paid for this bond? (Assume annual coupon payments)
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What will happen to the bond price if the yield to maturity rises to 9 percent? (give
theoretical and calculation answers)
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The Laymans Guide To Managing Your Investments
Authors: Thomas Dunleavy
1st Edition
979-8763592214
