Suppose a ten-year, $1,000 bond with an 8.1% coupon rate and semiannual coupons is trading for $1,034.23. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.1% APR, what will be the bond's 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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Suppose a​ ten-year,

$1,000

bond with an

8.1%

coupon rate and semiannual coupons is trading for

$1,034.23.
Suppose a ten-year, $1,000 bond with an 8.1% coupon rate and semiannual coupons is trading for $1,034.23.
a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?
b. If the bond's yield to maturity changes to 9.1% APR, what will be the bond's price?
Transcribed Image Text:Suppose a ten-year, $1,000 bond with an 8.1% coupon rate and semiannual coupons is trading for $1,034.23. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.1% APR, what will be the bond's price?
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