What is your bond current market price


Please assist with the given finance-related problem.

In the March of 1994, you purchased a new 25-year bond. The principal amount (i.e. maturity value) of this bond is $1,000 and it pays a coupon rate of 12%.

1) If comparable bonds today (March of 2007) have a yield to maturity of 14%, what is your bond's current market price?

2) If interest rates on comparable bonds are currently 10%, what is your bond's current market price?

3) Explain why the prices are different from answers a and b (assuming they are different).

4) If your bond has a call feature and will be called in March of 2010 at a call price of $1150, what is the bond's current value if similar bonds currently return 14%?

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Finance Basics: What is your bond current market price
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