8 Assume a 10-year Treasury bond has a coupon rate of 3.2 % and par value of $1000, and yield to maturity of 2%.Is this bond selling at a premium or discount?Explain why?5.If the yield curve is flat, which bond offers a better yield to maturity? X or Y?Bond X is a 5-year bond, and bond Y is a 30-year bond.

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Assume a 10-year Treasury bond has a coupon rate of 3.2% and par value of $1000, and yield to maturity of 2%. Is this bond selling at a premium or discount?

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 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...

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Question

Assume a 10-year Treasury bond has a coupon rate of 3.2 % and par value of $1000, and yield to maturity of 2%.
Is this bond selling at a premium or discount?
Explain why?
5.
If the yield curve is flat, which bond offers a better yield to maturity? X or Y?
Bond X is a 5-year bond, and bond Y is a 30-year bond.

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