Consider the following four corporate bonds that have semiannual compounding: Bond Price Coupon Rate Years to...

 

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Consider the following four corporate bonds that have semiannual compounding: Bond Price Coupon Rate Years to Maturity # 1 $1000.00 8% 5 #2 $932.05 7% 10 #3 $1067.95 $1098.96 9% 9% 10 20 3) Which of these bonds sells at a discount? 4) If the YTM of these bonds increased to 9%, which bond's price would be most sensitive to this change in YTM? 5) If the YTM of these bonds decreases to 7%, which bond's price would be most sensitive to this change in YTM? Consider the following four corporate bonds that have semiannual compounding: Bond Price Coupon Rate Years to Maturity # 1 $1000.00 8% 5 #2 $932.05 7% 10 #3 $1067.95 $1098.96 9% 9% 10 20 3) Which of these bonds sells at a discount? 4) If the YTM of these bonds increased to 9%, which bond's price would be most sensitive to this change in YTM? 5) If the YTM of these bonds decreases to 7%, which bond's price would be most sensitive to this change in YTM?

Answer rating: 100% (QA)

3 Bond 2 sells at a discount since its price 93205 is les... View the full answer