Question: Please answer a) b) and c) QI A 3-year bond with par value of $1000 making annual coupon payments of $50 is priced at $1000.

 Please answer a) b) and c) QI A 3-year bond with

Please answer a) b) and c)

QI A 3-year bond with par value of $1000 making annual coupon payments of $50 is priced at $1000. What is the yield to maturity of the bond (without any calculation, are you able to answer this question?)? If the bond is held to maturity, what will be the Holding Period Return and realized compound yield (annualized) if immediately after purchase the market interest rate until maturity: a) drops to 3% b) stays at 5% c) increases to 6%

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