What is the yield to maturity on bond

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Consider a five-year, default-free bond with annual coupons of 5 % and a face value of $ 1,000 and assume zero-coupon yields on default-free securities are as summarized in the following table: Maturity 1 year 2 years 3 years 4 years 5 years Zero-Coupon Yields 4.00 % 4.30 % 4.50 % 4.70 % 4.80 %

a. What is the yield to maturity on this bond?

b. If the yield to maturity on this bond increased to 5.20 % , what would the new price be?

Reference no: EM131989714

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