Question: Let B, be the value at time t in years of a bond with maturity T paying annual coupon c with face Thus B. =

Let B, be the value at time t in years of

Let B, be the value at time t in years of a bond with maturity T paying annual coupon c with face Thus B. = [1-_1_lt_1 T-7: value 1 and yield to maturity y. Thus yL (1 + y)?") (1 + y) Show that the fractional increases in value per year of the bond is AB Bt+1-B1 BTB = y - current yield

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