21. Consider a coupon bond that has a $1,000 par value and a coupon rate of 10%. The bond is currently sell- ing for $1,044.89 and has two years to maturity. What is the bond's yield to maturity? 22. What is the price of a perpetuity that has a coupon of $50 per year and a yield to maturity of 2.5%? If the yield to maturity doubles, what will happen to its price?
21. Consider a coupon bond that has a $1,000 par value and a coupon rate of 10%. The bond is currently sell- ing for $1,044.89 and has two years to maturity. What is the bond's yield to maturity? 22. What is the price of a perpetuity that has a coupon of $50 per year and a yield to maturity of 2.5%? If the yield to maturity doubles, what will happen to its price?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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21. Consider a coupon bond that has a $1,000 par value
and a coupon rate of 10%. The bond is currently sell-
ing for $1,044.89 and has two years to maturity. What
is the bond's yield to maturity?
alue
for
n in
22. What is the price of a perpetuity that has a coupon
of $50 per year and a yield to maturity of 2.5%? If
the yield to maturity doubles, what will happen to its
price?
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