A $1,000 bond has a coupon of 6 percent and matures after 10 years. a. What would

Question:

A $1,000 bond has a of 6 percent and matures after 10 years.
a. What would be the bond's price if comparable debt yields 8 percent?
b. What would be the price if comparable debt yields 8 percent and the bond matures after five years?
c. Why are the prices different in a and b?
d. What are the current yields and the yields to in a and b?
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... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...