# Suppose a 5% coupon, 4 year bond is selling for $990. The face value is $1000. The

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## Question:

Suppose a 5% coupon, 4 year bond is selling for $990. The face value is $1000. The coupon is paid every six months. Answer the following questions.

(a) Calculate the yield to maturity of this bond.

(b) Calculate the price of this bond if the yield to maturity increases by 1% with maturity unchanged.

(c) Calculate the price of this bond if the yield to maturity decreases by 1% with maturity unchanged.

**Related Book For**

## Financial Accounting an introduction to concepts, methods and uses

ISBN: 978-0324789003

13th Edition

Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis