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1.Use the bond term's below to answer the question Maturity 6 years Coupon Rate 4% Face...

1.Use the bond term's below to answer the question
Maturity 6 years
Coupon Rate 4%
Face value $1,000
Annual Coupons
Market Interest Rate 6%

Assuming the YTM remains constant throughout the bond's life, what is percentage capital gains/loss between periods 2 and 3 ?

1.70%
1.75%
1.79%
1.64%

2.

Use the bond term's below to answer the question
Maturity 5 years
Coupon Rate 4%
Face value $1,000
Annual Coupons
Market Interest Rate 6%

Assuming the YTM remains constant throughout the bond's life, what is the bond's price in period 2 ?

$901.47
$965.47
$946.54

3.

Use the bond term's below to answer the question
Maturity 4 years
Coupon Rate 5%
Face value $1,000
Annual Coupons
YTM 7%

Assuming the YTM remains constant throughout the bond's life, what is the bond's current yield between periods 3 and 4 ?

5.00%
4.85%
5.10%

4.

Use the bond term's below to answer the question
Maturity 7 years
Coupon Rate 5%
Face value $1,000
Annual Coupons
Market Interest Rate 3%

Assuming the YTM remains constant throughout the bond's life, what is percentage capital gains/loss between periods 6 and 7 ?

Solutions

Expert Solution

jeff jeffy answered 1 year ago
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