# HW3 - Current Yield 0.13 Same holds for the price moving...

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YTM 32 As the bond moves further toward maturity it will move Coupon Rate 0.12 closer to the par value – and toward the \$1000 price mark. K 0.11 The capital gains/loss yield is negative because the bond is selling PV \$1,137.01 a premium – at a price over par. When K falls below Current Yield 0.11 the coupon rate, the bond’s value rises above its par value. Capital Gains/Loss Yield 0.14 K 0.13 The capital gains/loss yield is positive because the bond is selling PV \$924.62 at a discount – the opposite of the reasoning above.
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Unformatted text preview: Current Yield 0.13 Same holds for the price moving towards par value closer to Capital Gains/Loss Yield-0.08 maturity – the \$1000 price mark. YTM 32 25 20 10 3 0.15 \$802.28 \$806.08 \$812.22 \$849.44 \$931.50 0.13 \$924.62 \$926.70 \$929.75 \$945.74 \$976.39 0.12 \$1,000.00 \$1,000.00 \$1,000.00 \$1,000.00 \$1,000.00 0.1 \$1,190.53 \$1,181.54 \$1,170.27 \$1,122.89 \$1,049.74 0.05 \$2,106.19 \$1,986.58 \$1,872.35 \$1,540.52 \$1,190.63 Daniel Shriver HW # 3 - Bond Valuation...
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