Say HVN issued a $100 million 30-year bond at par on 31.March, 2000 (lets call it Bond A). Bond A has a yield-to-maturity today of 6.5% (today being the day Min and Kelvin are having their conversation) and a coupon rate of 8%, paid semiannually.

1. 1. What is the price today of Bond A?

2. What was the yield on Bond A on the day it was issued on 31.March, 2000?

3. If HVN issued a new zero-coupon bond today with the same face value and maturity date as Bond A, what price would it sell for?

4. One year ago, HVN issued another bond (Bond B) that pays annual coupons and has the same face value and maturity date as Bond A. Today Bond B is trading at par. What is the price and yield to maturity of Bond B today? What is its coupon rate? What is the coupon payment?

Answer rating: 100% (QA)

1 What is the price today of Bond A 2 What was the yield on Bond A on the day it was issued on 31Ma... View the full answer