Consider a bond with a 7% annual coupon and a face value of $1,000. Complete the following table.

 years to maturity-3-3-6-9-9

yield to maturity-5-7-7-7-9

current price-x-x-x-x-x

What is the yield to maturity of a zero-coupon bond, with two years to maturity, if its current price is $85, and its face value is $100?

Use linear interpolation to estimate the yield to maturity for a bond with a face value of $100, a coupon of 10%, and 4 years to maturity. Its current price is $95.

What is the price of a perpetuity that has a coupon of $50 per year and a yield to maturity of 2.5%? If the yield to maturity doubles, what will happen to its price?

A 10-year, 7% coupon bond with a face value of $1,000 is currently selling for $871.65. Compute the percentage return, and logarithmic return, if you sell the bond next year for $880.10.

Calculate the duration of a $1,000, 6% coupon bond with three years to maturity. Assume that all market interest rates are 7%.

A bond has a duration of 2.83 years, and the interest rate is 7.0%. 

Calculate the expected price change if interest rates drop to 6.75% using the duration approximation.

Answer rating: 100% (QA)

To answer your questions Ill provide stepbystep calculations for each scenario 1 Yield to maturity of a zerocoupon bond with two years to maturity and ... View the full answer