The question i have to answer: Prices and yieldsA 10-year U.S. Treasury bond with a face value
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Question:
The question i have to answer:
- Prices and yieldsA 10-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.5% (2.75% of face value every six months). The reported yield to maturity is 5.2% (a six-month discount rate of 5.2/2 = 2.6%).
a. What is the present value of the bond?
b. Generate a graph or table showing how the bond's present value changes for semiannually compounded interest rates between 1% and 15%.
Through course hero i understand part a, there was a good explanation on how to get there, but i'm confused on how they answered part b.
if someone can help that would be awesome
Related Book For
Corporate Finance
ISBN: 9781265533199
13th International Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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