Suppose you have a bond with 5 years to maturity what is, Financial Management

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Suppose you have a bond with 5 years to maturity what is

1. Suppose you have a bond with 5 years to maturity. The face value of the bond is $1,000 and its coupon rate is 5 percent (annual payments). If the bond is traded at $970, what is the bond’s yield to maturity (YTM)?

A 3.21% B 4.54% C 5.71% D 6.54%

2. You are considering investing in a GM bond with 7 years to maturity. The face value of the bond is $1,000. The coupon rate is 6% (annual payments). When the market requires a yield to maturity of 5% for this bond, what is the price of the GM bond?

A $934.6 B $946.9 C $1,043.7 D $1,057.9

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