What is this note yield to maturity

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Albertson, Inc., a food company, recently issued a 2-year note that pays a 3% coupon rate (paid annually) and expires on August 15, 2019. The current price of this note is 100-05 (in points and fractions)

a) What is this note’s yield to maturity? (Once again, use the “bond template” sheet available on Reggie Net, and assume that the bond’s settlement date is December 1, 2017)

b) It is now one year later and market yields for bonds/notes with similar characteristics have risen to 3.5%. What should now be the (dollar) price of the Albertson’s note? How do you explain the change of price from one year to the other?

Reference no: EM131923708

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