Jason Greg is a recen retiree who is interested in investing some of his savings in coporate bonds. Listed below are the bonds he considering adding to his portfolio.
Bond A has a 7.5% semiannual coupon, matures in 12 years, and has a $1000 face value
Bond B has a 10% semiannual coupon, matures in 12 years, and has a $1000 face value
Bond C has a 11.5 % semiannual coupon, matures in 12 years, and has a $1000 face value.
Each bond has a YTM of 10%.
a. Before calculating the price of the bonds, indicate whether each bond is trading at a premium, discount or par
b. Calculate the price of each of these bonds
c. Calculate the current yield for each bond.