a If the government sold a 10 year gilt with a par value of 100 and an (annual) coupon of 9 per cent, what price can be charged if investors require a 9 5 per cent yield to maturity on such bonds b If yields to maturity on bonds of this risk class fall to 8 5 per cent, what could the bonds be sold for c If it were sold for 105, what yield to maturity is the bond offering d What is the flat yield on this bond if it is selling at 105

Question: a. If the government sold a 10-year gilt with a par value of 100 and an (annual) coupon of 9 per cent, what price can

a. If the government sold a 10-year gilt with a of £100 and an (annual) of 9 per cent, what price can be charged if investors require a 9.5 per cent yield to on such bonds?
b. If yields to on bonds of this risk class fall to 8.5 per cent, what could the bonds be sold for?
c. If it were sold for £105, what yield to is the bond offering?
d. What is the flat yield on this bond if it is selling at £105?

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