Compute a new market price for bond a

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Suppose you are asked to analyze three bonds. Bond A matures in 1 year, Bond B matures in 5 years, and Bond C matures in 15 years. Each of the three bonds has a coupon rate of 6% (paid annually) and a yield to maturity is 3.8%.

Question a. What is the current market price for each bond?

Question b. Compute a new market price for Bond A, Bond B and Bond C at the following two yields to maturity:

Yield To Maturity = 5%

Yield To Maturity = 10%.

Question c. Compute a new market price for Bond A, Bond B and Bond C in case the coupon rate is increased to 8% and coupon is paid:

Semiannually

Quarterly

Question d. Also calculate the effective rate for monthly coupon payment whereas the coupon rate is 9%

Reference no: EM132544309

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