Relationship between coupon-ytm

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Rick bought a 30-year bond when it was issued by Macroflex Corporation 15 years ago. The bond has a $1,000 face value and a coupon rate equal to 7 percent and the coupon is paid every six months. If the yield on similar-risk investments is 8 percent, a. What is the current market value (price) of the bond? b. Suppose interest rate levels rise to the point where such bonds now yield 10 percent. What would be the price of Macroflex bond? c. At what price would Macroflex bonds sell if the yield on them was 5 percent? d. What do you observe regarding the relationship between interest rate (YTM) bond's price? e. What do you observe regarding the relationship between coupon, YTM and the bond's price?

Reference no: EM132134771

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