Question: Q2 (This question is not cumulative) a) Suppose a five-year, $1,000 bond with semiannual coupons has a price of $957.35 and yield to maturity of
Q2 (This question is not cumulative) a) Suppose a five-year, $1,000 bond with semiannual coupons has a price of $957.35 and yield to maturity of 6%. What is the bond's coupon rate? b) Hacker Software has 6.2 percent coupon bonds on the market with nine years to maturity. The bonds make semiannual payments and currently sell for 105 percent of par. What is the yield to maturity on this bond? (Write down the expression for YTM and then use a financial calculator or a spreadsheet program to find the answer. Please write down your answer in the form of x.xx%.) c) Consider a five-year bond with 7.5 percent annual coupon, currently selling at par. Your estimate of its yield to maturity a year from today is 7.5%. Suppose you plan to sell your bond at the end of one year, right after receiving your coupon payment. What is your expected return on bond investment? Note: You don't need a calculator to answer this question, if you have sufficient knowledge on bond. Explain how you reach your
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