What is the relationship between bond prices and interest


Using the information below, compute the prices of the following semi-annually payment bonds. Show your computation.

Par Value        Coupon Rate       Yield to Maturity     Years to Maturity

$3000              8                        12%                       15

$3000              8                           8                              15

$3000             8                          4                              15

a) Indicate which bond is selling at discount, par, and premium. (Use the formula.)

b) What is the relationship between bond prices and interest rates?

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