Question

A $1,000 bond has a coupon of 6 percent and matures after 10 years.
a. What would be the bond's price if comparable debt yields 8 percent?
b. What would be the price if comparable debt yields 8 percent and the bond matures after five years?
c. Why are the prices different in a and b?
d. What are the current yields and the yields to maturity in a and b?


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  • CreatedMarch 19, 2015
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