What is the expected Capital Gains Yield for bond

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Question

1. A 6.78% annual coupon, 24-year bond has a yield to maturity of 7.89%. Assuming the par value is $1,000 and the YTM is expected not to change over the next year, what should the price of the bond be today?

2. A 3.59% annual coupon, 21-year bond has a yield to maturity of 8.91%. Assuming the par value is $1,000 and the YTM is expected not to change over the next year, what is bond price expected to be in one year?

3. A 4.33% annual coupon, 8-year bond has a yield to maturity of 3.44%. Assuming the par value is $1,000 and the YTM is expected not to change over the next year, what is the expected Capital Gains Yield for this bond? Please share your answer as a %.

4. A 3.5% annual coupon, 14-year bond has a yield to maturity of 5.85%. Assuming the par value is $1,000 and the YTM is expected not to change over the next year, what is the expected Current Yield for this bond? Please share your answer as a %.

Reference no: EM133495924

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