Suppose a ten-year, $1,000 bond with an 8.3% coupon rate and semiannual coupons is trading for $1,035.03. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.6% APR, what will be the bond's price?

Suppose a ten-year, $1,000 bond with an 8.3% coupon rate and semiannual coupons is trading for $1,035.03. a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? b. If the bond's yield to maturity changes to 9.6% APR, what will be the bond's price?

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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Question

Suppose a ten-year, $1,000 bond with an 8.3% coupon rate and semiannual coupons is trading for $1,035.03.
a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?
b. If the bond's yield to maturity changes to 9.6% APR, what will be the bond's price?
a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?
The bond's yield to maturity is ☐ %. (Round to two decimal places.)

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