Question: a ) What is the difference between the coupon and the yield to maturity of a bond? b ) Why would the coupon exceed the

a) What is the difference between the coupon and the yield to maturity of a bond?
b) Why would the coupon exceed the yield and vice versa?
c) Why is the yield on a 10y US T-bond higher than on a 10y German Government Bond (known as a Bund)?
2. A 30-year Treasury bond is issued with a par value of $100, paying a coupon of 6% or $60 per year. If interest rates increase after the T-bond is issued, what happens to the bonds a) coupon rate? b) price? c) yield to maturity?
3. If a bond with par value of $1,000 and a coupon of 8% is selling at a price of $970, is the bonds yield to maturity more or less than 8%?

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