In: Finance
Suppose a ten-year, $1,000 bond with an 8.5 % coupon rate and semiannual coupons is trading for $1,035.71.
a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?
b. If the bond's yield to maturity changes to 9.1 % APR, what will be the bond's price?