Five years ago Ashok Cobb bought a 7%, $1,000 par value floating rate bond. Today the rates on bonds of similar risk have dropped to 4%. Find the most likely value of John's bond today. Explain your answer.
The International Copper Company has a bond outstanding with an $80 annual interest payment, a market price of $750, and a maturity date in five years. Find (1) the coupon rate; (2) the current rate; (3) the approximate yield to maturity. (See p. 513.)