Consider a bond with a 7% annual coupon and a face value of $1,000. Complete the following table:
|
Years to Maturity
|
Discount Rate
|
Current Price
|
|
3
|
5
|
|
|
3
|
7
|
|
|
6
|
7
|
|
|
9
|
7
|
|
|
9
|
9
|
|
What relationship do you observe between yield to maturity and the current market value?