Question: Explain the basic features of a typical bond instrument. Explain how you would price the following government bond: it has a coupon of 4%

Explain the basic features of a typical bond instrument. Explain how you would price the following government bond: it has a coupon of 4% payable annually, has a term to maturity of 3 years, and currently yields 2.5%. What would happen to the bond's yield to maturity (YTM) (a) if the coupon were higher (b) if the bond's price were lower?

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