Consider a 30 year 10000 risk-free bond with annual coupon, Business Economics

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Consider a 30 year 10000 risk-free bond with annual coupon

Consider a 30 year $10,000 (risk-free) bond with annual coupon rate of 4.25%.

(a) What is the annual coupon payment?

(b) If the yield to maturity on the bond is 4%, what must be the market price for the bond? Is the bond selling at a discount of (below) or a premium of (above) face value?

(c) If the yield to maturity on the bond is 6%, what must be the market price for the bond? Is the bond selling at a discount of (below) or a premium of (above) face value?

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Business Economics: Consider a 30 year 10000 risk-free bond with annual coupon

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Business Economics: Consider a 30 year 10000 risk-free bond with annual coupon

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