1. Suppose a ten-year, $1,000 bond with an 8.0% coupon rate and semiannual coupons is trading for $1,034.74.
a. What is the bond's yield to maturity? (expressed as an APR with semiannual compounding)
b. If the bond's yield to maturity changes to 9.0% APR, what will be the bond's price?
2. Suppose a ten-year, $1,000 bond with an 8.7% coupon rate and semiannual coupons is trading for $1,035.05.
a. What is the bond's yield to maturity? (expressed as an APR with semiannual compounding)?
b. If the bond's yield to maturity changes to 9.8% APR, what will be the bond's price?