Suppose a 10-year, $1000 bond with an 8.1% coupon rate and semiannual coupons is trading for $1035.61.
Question:
Suppose a 10-year, $1000 bond with an 8.1% coupon rate and semiannual coupons is trading for $1035.61.
a. What is the bond’s yield to maturity (expressed as an APR with semiannual compounding)?
b. If the bond’s yield to maturity changes to 9.2% APR, what will the bond’s price be?
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Step by Step Answer:
a To calculate the bonds yield to maturity YTM we need to find the interest rate that makes the pres...View the full answer
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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