A bond has a $1,000 par value, 12 years to maturity, and an 8% annual coupon and sells for$980. a. What is its yield to maturity (YTM)? b. Assume that the yield to maturity remains constant for the next three years. What will the price be 3 years from today? Please answer using the calculator format

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
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A bond has a $1,000 par value, 12 years to maturity, and an 8% annual coupon and sells for$980. a. What is its yield to maturity (YTM)? b. Assume that the yield to maturity remains constant for
the next three years. What will the price be 3 years from today? Please answer using the calculator format
Transcribed Image Text:A bond has a $1,000 par value, 12 years to maturity, and an 8% annual coupon and sells for$980. a. What is its yield to maturity (YTM)? b. Assume that the yield to maturity remains constant for the next three years. What will the price be 3 years from today? Please answer using the calculator format
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