Your firm wants to issue a bond with semi-annual coupon payments, an annual coupon rate of 7%, and a face value of $1000. The bond will mature in 10 years. What will the YTM be if the price is $600, 1000, and 1200? What do you notice about the relationship between bond prices and their yields to maturity?

What is the YTM if the price of the bond is $600? (Enter the percentage rate as a whole number with two decimal places, such as 10.19.)

What is the YTM if the price of the bond is $1000?

What is the YTM if the price of the bond is $1200?

What is the relationship between the price of a bond and its yield to maturity or total return?(select correct answer below)

A. There is no relationship because yields to maturity are fixed at the time the bond is issued.

B. As the bond price increases, the yield to maturity increases.

C. The bond price is exactly equal to the yield to maturity times the face value.

D. As the bond price increases, the yield to maturity decreases.

When the bond sells at less than face value, we say it is selling at a discount. When will a coupon bond sell at a discount? (select correct answer below)

A. When the bond approaches maturity.

B. When the coupon rate equals the yield to maturity.

C. When the coupon rate offered is more than the yield to maturity.

D. When the coupon rate offered is less than the yield to maturity.