What is the current yields and yields to maturity


Question: A bond has the following terms:

Principal amount $1,000
Semi-annual interest $50
Maturity 10 years

Q1. What is the bond's price if comparable debt yields 12%?

Q2. What is the current yields and yields to maturity?

Q3. What would be the bond's price if interest rates declined to 8%

Q4. What two generalizations may be drawn from the above price changes? In other words,

Q5. Explain the relationship in the above example between interest rates (at 12% vs 8%) And the price of the bond.

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Finance Basics: What is the current yields and yields to maturity
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