Question 1: Bond sold for $1,065.12. the bond life is 9 years, yeild to maturity is 7 percent, what is the coupon rate?
Question 2:
a. Several years ago bonds were issued at face value yeild to maturity of 7 percent. with 8 years left until maturity company hits hard times. yield to maturity increases to 15%. what happens to bond price?
b. Investors believe company can make good on payments, but will go bankrupt when bond matures and principles come due. investors will recieve 80% of face value at maturity. If bought today what yeild to maturity would they investor expect to recieve?