An 87 twenty-year bond yields 67 if the yield remains


1. An 8.7%, twenty-year bond yields 6.7%. If the yield remains unchanged, what will be its price one year hence? Assume annual coupon payments. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Price ______________

2. What is the total return to an investor who held the bond over this year? (Do not round intermediate calculations. Round your answer to 1 decimal place.)

Total Return ___________________

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Financial Management: An 87 twenty-year bond yields 67 if the yield remains
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