Suppose a 5% coupon, 4 year bond is selling for $990. The face value is $1000. The
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Question:
Suppose a 5% coupon, 4 year bond is selling for $990. The face value is $1000. The coupon is paid every six months. Answer the following questions.
(a) Calculate the yield to maturity of this bond.
(b) Calculate the price of this bond if the yield to maturity increases by 1% with maturity unchanged.
(c) Calculate the price of this bond if the yield to maturity decreases by 1% with maturity unchanged.
Related Book For
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
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