Question

In: Finance

Suppose a​ ten-year, $1,000 bond with an 8.5% coupon rate and semiannual coupons is trading for...

Suppose a​ ten-year,

$1,000

bond with an

8.5%

coupon rate and semiannual coupons is trading for

$1,034.79.

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

9.4%

​APR, what will be the​ bond's price?

Solutions

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