f a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm this for both a premium and a discount bond using a 4-year 4.0 percent coupon bond with annual coupon payments and a face value of $1,000. Assume the yield to maturity is 3.0 percent. Assume the yield to maturity is 5.0 percent.
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If a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm this for both a premium and a discount bond using a 4-year 4.0 percent coupon bond with annual coupon payments and a face value of $1,000.
Assume the yield to maturity is 3.0 percent.
Assume the yield to maturity is 5.0 percent.
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