Question: A 1 0 - year bond with a face value of $ 1 , 0 0 0 and 1 2 % annual coupons is trading
A year bond with a face value of $ and annual coupons is trading with a current yield to
maturity of compounded annually.
An investor recently purchased the bond and plans to sell it in years time, right after receiving a coupon
payment. The projected yield to maturity YTM at the sale is compounded annually, and the expected
reinvestment rate for coupons is compounded annually.
What is the price of the bond today?
$
Round to two decimal places
What is the expected bond price in years' time?
$
Round to two decimal places
What is the total expected value of the reinvested coupon payments in years' time?
$
Round to two decimal places
What will be the expected annual rate of return on this bond investment in years' time?
Round to two decimal places
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