What is the effective annual yield

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1. One More Time Software has 9.2 percent coupon bonds on the market with 18 years to maturity. The bonds make semiannual payments and currently sell for 125.2 percent of par. a. What is the current yield on the bonds? b. What is the YTM? c. What is the effective annual yield?

2. Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years to maturity, whereas Bond Dave has 11 years to maturity. (Do not round your intermediate calculations.)

If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Sam?

If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave?

If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Sam be then?

If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Dave be then?

Reference no: EM132073970

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