Buying bond that offers annual coupon rate

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1. You are thinking about buying a bond that offers an annual coupon rate of 6% with exactly 8 years remaining to maturity. The face value of the bond is $1,000 and your required return is 5%. How much should you be willing to pay for the bond?

2. You find a 15% annual coupon bond with a current price of $1,200 and a face value of $1,000. There are exactly 3 years remaining until the maturity of the bond. If you buy this bond now, what will your yield-to-maturity be?

Reference no: EM131838123

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