A) What is the yield to maturity at a current market price of (1) $829 or (2) $1,104?
B) Would you pay $829 for each bond if you thought that a “fair” market interest rate for each bond was 12 percent----that is, if rd = 12percent? Explain your answer?
Price and yield An 8 percent semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and the current yield of 8.21 percent. What are the bond’s price and YTM?
This question was asked on Jan 20, 2013 and answered on Jan 21, 2013.
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