Current yield and yield to maturity

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1. A 6 year bond with 1000 Rupees par value pays 80 Rupees interest annually and sells for 950 Rupees. What is the coupon rate, current yield and yield to maturity?

2. A firm sells bonds with a par value of 1000 Rupees, carry a 8% coupon rate, with a maturity period of 9 years. The bond sells at a yield to maturity of 9%.

a. What is the interest payment you should receive each year?

b. What is the selling price of the bond?

c. What will happen to the bond price, if the yield to maturity falls to 7%?

3. Pakistan bank issues a 10 year treasury bond at 12% coupon with the par value of 1000 Rupees. If the market yield increases shortly afterwards, what happens to the following parameters:

a) coupon rate

b) price

c) current yield

d) yield to maturity.

Reference no: EM132546500

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