What is the major determinant of bond prices explain your


Answer the following questions dealing with bonds

a. What is the major determinant of bond prices? Explain your answer

b. The ABC bond carries a 6.5% semi-annual coupon rate and matures in 23 years. If the market yield on these bonds is 8%, calculate the price of the bond.

c. If interest rates (yields) do not change in the marketplace, explain what happens to the price on a discounted bond as time goes by.   Explain why that occurs.

d. If John purchased the bond at $1,050, what would his yield to maturity be if the stated rate is 6% (compounded semi-annually) and maturity 10 years?

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