Question: If a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm
If a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm this for both a premium and a discount bond using a 4 -year 3 percent coupon bond with annual coupon payments and a face value of $1,000. a. Assume the yield to maturity is 2 percent. b. Assume the yield to maturity is 4 percent. Complete this question by entering your answers in the tabs below. Assume the yield to maturity is 2 percent. (Do not round intermediate calculations. Enter "Bond price" answers to 2 decimal places and "Rate of return" rounded to the nearest whole numbec)
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