Problem:
A 25-year maturity bond with par value $1,000 makes semiannual coupon payments at a coupon rate of 8%.
Requirement:
Question 1: Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is $960.
Question 2: Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is $1,000.
Question 3: Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is $1,040.
Note: Provide support for your underlying principle.