You are thinking about diversifying your portfolio into corporate bonds. After conducting a little research, you find

Question:

You are thinking about diversifying your into corporate bonds. After conducting a little research, you find an A-rated bond from Ichabod, Inc. with 10 years to maturity. The bond pays an $80 annual and is selling for $1070.24, implying a 7.00% yield to maturity. You also notice that the bond's price fluctuates considerably, so you begin estimating the minimum price at which you might acquire several of these bonds.
a.) What is the bond's yield if you buy it for $1000?
b.) Explain why the bond's YTM at a price of $1000 differed from its YTM of 7.00% at a price of $1070.24.
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...