Problem:
A 25-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 8%.
Requirement:
Question 1: What is the bond's yield to maturity if the bond is selling for $960? Enter annual yield to maturity as your answer.
Question 2: What is the bond's yield to maturity if the bond is selling for $1,000? Enter annual yield to maturity as your answer.
Question 3: What is the bond's yield to maturity if the bond is selling for $1,160? Enter annual yield to maturity as your answer.
Note: Please provide reasons to support your answer.