What will be the price of the bond three years from today

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Question: (a) A bond that matures in 8 years sells for $960.00. The bond has a face value of $1000.00 and a 9 percent annual coupon.

(i) What is the bond's current yield.

(ii) What is the bond's yield to maturity.

(iii) Assume the yield to maturity remains the same for the next three years, what will be the price of the bond three years from today.

(b) A bond with a face value of $1000.00 has a 15 year maturity and a 7.5 percent annual coupon. The bond has a current yield of 7.5 percent. What is the bond's yield to maturity.

Reference no: EM132067260

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