A bond has a par value of 1000 a time to maturity of 6


A bond has a par value of $1000, a time to maturity of 6 years, and a coupon rate of 9% with interest paid annually.If the current market price is $845,

a. What is the bond's yield to maturity?

b. What is its current yield?

c. What is its approximate capital gain yield of this bond over the next year?

d. Suppose the interest fall to 10% right after the bond is purchased and stay at that level. What will be the holder's holding period yeild if the bond is sold after 2 years?

 

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Finance Basics: A bond has a par value of 1000 a time to maturity of 6
Reference No:- TGS0605599

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