Problem
Assume that the financial management corporation's 1000-par-value bond had a 5.700% coupon, matures on May 15,2023, has a current price quote of 97.708, and has a yield to maturity of 6.034%. Given this information, answer the following questions:
a. What was the dollar price of the bond?
b. What is the bond's current yield?
c. Is the bond selling at par, at a discount, or at a premium? Why?
d. Compare the bond's current yield calculated in part b to its YTM and explain why they differ.