Suppose a ten-year, $1,000 bond with an 8.5% coupon rate and semiannual coupons is trading for $1,035.54. 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 9.2% APR, what will be the bond's price? a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? The bond's yield to maturity is 8 %. (Round to two decimal places.) b. If the bond's yield to maturity changes to 9.2% APR, what will be the bond's price? The new price for the bond is $ 869.59. (Round to the nearest cent.)

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 8.5% coupon rate and semiannual coupons is trading for $1,035.54.
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 9.2% APR, what will be the bond's price?
.....
a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?
The bond's yield to maturity is 8 %. (Round to two decimal places.)
b. If the bond's yield to maturity changes to 9.2% APR, what will be the bond's price?
The new price for the bond is $869.59. (Round to the nearest cent.)
Transcribed Image Text:Suppose a ten-year, $1,000 bond with an 8.5% coupon rate and semiannual coupons is trading for $1,035.54. 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 9.2% APR, what will be the bond's price? ..... a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? The bond's yield to maturity is 8 %. (Round to two decimal places.) b. If the bond's yield to maturity changes to 9.2% APR, what will be the bond's price? The new price for the bond is $869.59. (Round to the nearest cent.)
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