What is the effective annual bond yield

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1. A 15-year bond pays semiannually and has 12 year remaining. The coupon is $40 per year. Rates dropped by 50 basis points (“bips”) since issue.

What was the YTM at the issue of this bond?

What is the current YTM?

What is the effective annual bond yield?

What is the value of this bond?

Which amount is Par value, since none was mentioned.

2. A 20-year bond pays $40 per year and pays semiannually. The rates increased by 40 bips since and now there remains 16 years until maturity.

What was the YTM at the issue of this bond?

What is the current YTM?

What is the effective annual bond yield?

What is the value of this bond?

Which amount is Par value, since none was mentioned.

Reference no: EM131878177

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