In: Finance
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?