Question: Look again at Table. Suppose that spot interest rates all change to 4%a flat term structure of interest rates. a. What is the new yield

Look again at Table. Suppose that spot interest rates all change to 4%â€”a â€œflatâ€ term structure of interest rates.

a. What is the new yield to maturity for each bond in the table?

b. Recalculate the price of bondA.

Look again at Table. Suppose that spot interest rates all

Year ( Bond Price Yield to (PV) Maturity (V, %) 035 042 044 Discount factors 9246 8839 8418 Bond A (8% coupon): Payment (C 1,080 998.52 $1,075.82 3.98 Bond B (11% coupon): Payment (C) 1,110 $106.28 981.11 $1,189.10 Bond C (6% coupon): Payment (C) 1,060 55.47 53.03 892.29 $1,058.76 4.37 Bond D (strip) Payment (C $1,000 S841.78 4.40

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