Question: 1) Consider a $25,000 par value bond with a 7 percent, semi-annual coupon and 10 years remaining until maturity. a) If the bonds current market

1) Consider a $25,000 par value bond with a 7 percent, semi-annual coupon and 10 years remaining until maturity.

a) If the bonds current market price is $24,625, what is its yield to maturity?

b) What is the bonds current yield?

c) What is the bonds capital gains yield?

d) Assuming market interest rates remain unchanged, what will be the bonds price one year from today? Calculate the percentage change in the bonds price over this year. How does this figure relate to the capital gains yield in part c?

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