What would the bond price be in one year if its yield to


A bond has a face value of $1,000 and pays coupon once annually with 5% coupon rate. Its maturity is 20 years and the yield to maturity for the bond is currently 8%.

(a) What would the bond price be in one year if its yield to maturity stays at 8%?

(b) If the bond sells at a yield to maturity of 7% in year 1, find the before-tax holding-period return for a one year investment period.

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Financial Management: What would the bond price be in one year if its yield to
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