What is the price of the bond

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Problem: Consider a five-year, 15 percent annual coupon bond with a face value of $1,000. The bond is trading at a market yield to maturity of 12 percent.

Required:

Question 1: What is the price of the bond?

Question 2: If the market yield to maturity increases 1 percent, what will be the bond's new price?

Question 3: Using your answers to parts (a) and (b), what is the percentage change in the bond's price as a result of the 1 percent increase in interest rates?

Reference no: EM132460629

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