What is the major determinant of bond prices

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Reference no: EM13834964

Answer the following questions dealing with bonds

a. What is the major determinant of bond prices? Explain your answer

b. The ABC bond carries a 6.5% semi-annual coupon rate and matures in 23 years. If the market yield on these bonds is 8%, calculate the price of the bond.

c. If interest rates (yields) do not change in the marketplace, explain what happens to the price on a discounted bond as time goes by. Explain why that occurs.

d. If John purchased the bond at $1,050, what would his yield to maturity be if the stated rate is 6% (compounded semi-annually) and maturity 10 years?

Reference no: EM13834964

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