Question: Part II. Consider a five-year bond with a 10% coupon, paid every six-months and with yield-to- maturity 8% per annum semi-annual compounding. If the bond's

Part II. Consider a five-year bond with a 10% coupon, paid

Part II. Consider a five-year bond with a 10% coupon, paid every six-months and with yield-to- maturity 8% per annum semi-annual compounding. If the bond's yield-to-maturity remains constant, then in one year, will the bond price be higher, lower, or unchanged? Please justify your answer. (6 Marks)

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