What is the yield to maturity at market price

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1. Bond A has 5 years to mature. Interest is paid annually; the bonds have a $1,000 par value; and the coupon rate is 9%. 1. what is the yield to maturity, at current market price of $829. 2. what is the yield to maturity at a market price of $1,104.

2. a. You need a bond investment to fund an expected cash flow of 1931 in ten years. You buy a 20 year, 7% coupon bond to fund this liability because it a duration of 10 years. Find the price of the bond and the PV of the payment you have to make.

b. Now let the rate immediately change to 12%. Recalculate the price and the PV.

c. Now let five years pass and the rate still be 12%. Find a new price and a new PV..

Reference no: EM131897781

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