Question: Federer Corp. has issued a bond which carries an 9 percent coupon and paid semiannually. The face value of its bond is $1,000, and the

Federer Corp. has issued a bond which carries an 9 percent coupon and paid semiannually. The face value of its bond is $1,000, and the bond mature in 13 years. If the bond is priced to yield 8% so,

a. What is the price of Microchirp Corp's bond?

b. What would be the price of the bond if the yield rose to 1%?

c. What is the current yield on the bond if the YTM is 7%?

d. Explain the meaning your result?

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