Suppose a ten-year 1000 bond with an 80 coupon rate and


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?

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Financial Management: Suppose a ten-year 1000 bond with an 80 coupon rate and
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