Question

Suppose a ten-year, $ 1,000 bond with an 8.8 % coupon rate and semiannual coupons is trading for $ 1,034.65.

a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? .........% (Round to two decimal places)

b. If the bond's yield to maturity changes to 9.9 % APR, what will be the bond's price? .............$ (Round to nearest cent)

Answer 1

А 1 2 Par Value 3 Coupon Rate 4. Current Value 5 Years to Maturity 6 Frequency $1,000 8.80% $1,034.65 10 2 (semi-annual) 8 YTM 8.28% 10 New YTM 11 New Price 9.90% $931.2 12 13

А 2 Par Value 3 Coupon Rate 4 Current Value 5 Years to Maturity 6 Frequency 1000 0.088 1034.65 10 (semi-annual) 7 =B6*RATE(B5*B6,B3*B2/B6,-B4,B2) 8 YTM 9 10 New YTM 11 New Price 12 13 0.099 --PV(B10/B6,B5*B6,B3*B2/B6,B2)