Suppose a 10​-year, $1,000 bond with a 9% coupon rate and semiannual coupons is trading for a price of $955.79. a. What is the​ bond's yield to maturity​ (expressed as an APR with semiannual​ compounding)? b. If the​ bond's yield to maturity changes to 9% ​APR, what will the​ bond's price​ be?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter24: Enterprise Risk Management
Section: Chapter Questions
Problem 2P: A Treasury bond futures contract has a settlement price of 89’08. What is the implied annual yield?
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Suppose a
10​-year,
$1,000
bond with a
9%
coupon rate and semiannual coupons is trading for a price of
$955.79.
a. What is the​ bond's yield to maturity​ (expressed as an APR with semiannual​ compounding)?
b. If the​ bond's yield to maturity changes to
9%
​APR, what will the​ bond's price​ be?
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