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What is the yield to maturity for the bond

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Reference no: EM133089904

Question - Bond Valuation and Yield - A bond has a par value of $1,000, pays $70 semiannually and has a maturity of 15 years.

Required -

1) If the bond earns 12% per year, what is the price of the bond?

2) What is the yield to maturity for the bond?

3) What would be the bond's price if the rate earned declined to 8% per year?

4) If the maturity period is reduced to 10 years and the required rate of return is 8%, what would be the price of the bond?

5) What is the yield to maturity for the bond when the maturity is 10 years and the required rate of return is 8%?

6) What generalizations about bond prices, interest rates, and maturity periods can be made based on the calculations made above?

Reference no: EM133089904

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