Capital gains yield for the first year if yield to maturity

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A bond has a coupon rate of 3.25%, pays coupons semiannually, and has a maturity of 10 years. If the yield to maturity is 3.50%, calculate the current cost of a bond with a par value of 100. What is the current yield on the bond? Assume that one year has passed and that the yield to maturity remains the same at 3.50%.

1. What is the value or cost of the bond?

2. What would be the value at this time (after one year) if the yield to maturity is 8%?

3. What would the capital gains yield for the first year if the Yield to maturity after one year was 7.00%?

4. What would the YTM be if the current price of the bonds was 105?

Reference no: EM131052465

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