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Suppose four years ago you purchased a 10-year, zero-coupon bond with a face value of $100...

Suppose four years ago you purchased a 10-year, zero-coupon bond with a face value of $100 at a price of A. The bond currently trades at a price of B. Assume the YTM for this bond has been the same in the past four years (that is YTM in four years ago is equal to the YTM today). Compare the price A v.s. B.

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Answer #1

Price of Bond 4 years ago(A) = 100/(1 + YTM)10

Price of Bond today(B) = 100/(1 + YTM)6

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