Question: Consider a five year default free bond with annual coupons of 5

Consider a five-year, default-free bond with annual coupons of 5% and a face value of $1000.
a. Without doing any calculations, determine whether this bond is trading at a premium or at a discount. Explain.
b. What is the yield to maturity on this bond?
c. If the yield to maturity on this bond increased to 5.2%, what would the new pricebe?

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  • CreatedAugust 06, 2014
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