A bond has a $1,000 par value, 12 years to maturity, and a 9% annual coupon and sells for $1,110. 1. What is its yield to maturity (YTM)? Round your answer to two decimal places.% 2. Assume that the yield to maturity remains constant for the next two years. What will the price be 2'years from today? Do not round intermediate calculations. Round your answer to the nearest cent.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...
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A bond has a $1,000 par value, 12 years to maturity, and a 9% annual coupon and sells for $1,110.
1. What is its yield to maturity (YTM)? Round your answer to two decimal places.%
2. Assume that the yield to maturity remains constant for the next two years. What will the price be 2'years from
today?
Do not round intermediate calculations.
Round your answer to the nearest cent.
Transcribed Image Text:A bond has a $1,000 par value, 12 years to maturity, and a 9% annual coupon and sells for $1,110. 1. What is its yield to maturity (YTM)? Round your answer to two decimal places.% 2. Assume that the yield to maturity remains constant for the next two years. What will the price be 2'years from today? Do not round intermediate calculations. Round your answer to the nearest cent.
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