Question: Problem 3 - 6 Bond prices and yields A 1 6 - year U . S . Treasury bond with a face value of $

Problem 3-6 Bond prices and yields
A 16-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.75%(2.875% of face value every six months). The
reported yield to maturity is 5.4%(a six-month discount rate of 5.42=2.7%).
a. What is the present value of the bond?
b-1. If the yield to maturity changes to 1%, what will be the present value?
b-2. If the yield to maturity changes to 8%, what will be the present value?
b-3. If the yield to maturity changes to 15%, what will be the present value?
Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.
Problem 3-6 Bond prices and yields A 16-year U.S. Treasury bond

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