Here are the prices of three bonds with 10-year maturities: Bond Coupon (%) Price (%) 2 ............................

Question:

Here are the prices of three bonds with 10-year maturities:

Bond Coupon (%) Price (%)

2 ............................ 81.62

4 ............................ 98.39

8 ........................... 133.42

If coupons are paid annually, which bond offered the highest yield to maturity? Which had the lowest? Which bonds had the longest and shortest durations?

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...