A bond has 19 years to maturity, a coupon of $50, a par value of $1000 and is trading with at YTM of 8%.
A) What is the Coupon Yield now?
B) With YTM at 8%, what dollar value appears on her statement for the bond? i.e. what is the bond worth now?
The following year, interest rates fall. The bond makes its second $50 payment and has 18 years left. On her brokerage statement the YTM was now 4%.
The bond has 18 years to maturity, a coupon of $50, a par value of $1000 and is trading with at YTM of 4%.
A) After 2 years, what is the Coupon Yield?
B) With YTM at 4%, what dollar value appears on her statement for the value of the bond? i.e. what is the bond worth now?