2. Consider a bond selling at par ($1000) with a coupon rate of 6% and 10 years to maturity. (Assuming semi-annual coupon payments) (a) What is the price of this bond if the required yield is 8%? (b) What is the price of this bond if the required yield increases from 8% to 9%, and by what percentage did the price of this bond change?
2. Consider a bond selling at par ($1000) with a coupon rate of 6% and 10 years to maturity. (Assuming semi-annual coupon payments) (a) What is the price of this bond if the required yield is 8%? (b) What is the price of this bond if the required yield increases from 8% to 9%, and by what percentage did the price of this bond change?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 17P: Bond Value as Maturity Approaches An investor has two bonds in his portfolio. Each bond matures in 4...
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