8. What is the YTM of a $1,000 par value bond with a 10% coupon rate,...

8. What is the YTM of a $1,000 par value bond with a 10% coupon rate, semi-annual coupon payments, and 9 years to maturity if the bond currently sells for $900? Round to the nearest hundredth percent. Do not include a percent sign in your answer. (i.e. If your answer is 4.32%, then type 4.32 without a % sign)

9. Ford Motors’ bond is currently traded at the value of $1,208.70 and a yield of 4.22%. The current rating of the bond is BBB. If the bond rating company upgrades the rating to A, what will happen to the price and the yield of the bond?

Price: Decrease, Yield: Increase

Price: Decrease, Yield: Decrease

Price: Increase, Yield: Increase

Price: Decrease, Yield: Unchanged

Price: Unchanged, Yield: IncreaseUnchange

Price: Unchanged, Yield: Increase

Price: Increase, Yield: Decrease

Expert Solution

jeff jeffy answered 2 years ago

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