1. A 6% $1000 bond matures in 17 years and is selling at par. Find the...

 

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1. A 6% $1000 bond matures in 17 years and is selling at par. Find the yield to maturity (YTM) of the bond. (3 marks) 2. If the bond was selling at $1100, should the YTM of the bond be more than or less than 6%? (3 marks) b. ABC Inc bonds have an 8% coupon rate. Interest is paid semiannually. The bonds have a par value of $1,000 and will mature 10 years from now. The bond yields 9%. 1. What is the coupon payment received by the investor on a semiannual basis? (3 marks) 2. How much is the investor willing to pay for the bond? 3. Is this a premium or a discount bond and why? (8 marks) (3 marks) 1. A 6% $1000 bond matures in 17 years and is selling at par. Find the yield to maturity (YTM) of the bond. (3 marks) 2. If the bond was selling at $1100, should the YTM of the bond be more than or less than 6%? (3 marks) b. ABC Inc bonds have an 8% coupon rate. Interest is paid semiannually. The bonds have a par value of $1,000 and will mature 10 years from now. The bond yields 9%. 1. What is the coupon payment received by the investor on a semiannual basis? (3 marks) 2. How much is the investor willing to pay for the bond? 3. Is this a premium or a discount bond and why? (8 marks) (3 marks) 1. A 6% $1000 bond matures in 17 years and is selling at par. Find the yield to maturity (YTM) of the bond. (3 marks) 2. If the bond was selling at $1100, should the YTM of the bond be more than or less than 6%? (3 marks) b. ABC Inc bonds have an 8% coupon rate. Interest is paid semiannually. The bonds have a par value of $1,000 and will mature 10 years from now. The bond yields 9%. 1. What is the coupon payment received by the investor on a semiannual basis? (3 marks) 2. How much is the investor willing to pay for the bond? 3. Is this a premium or a discount bond and why? (8 marks) (3 marks) 1. A 6% $1000 bond matures in 17 years and is selling at par. Find the yield to maturity (YTM) of the bond. (3 marks) 2. If the bond was selling at $1100, should the YTM of the bond be more than or less than 6%? (3 marks) b. ABC Inc bonds have an 8% coupon rate. Interest is paid semiannually. The bonds have a par value of $1,000 and will mature 10 years from now. The bond yields 9%. 1. What is the coupon payment received by the investor on a semiannual basis? (3 marks) 2. How much is the investor willing to pay for the bond? 3. Is this a premium or a discount bond and why? (8 marks) (3 marks)