(Answered) Calculate the yield to maturity

Economics

Question:

A $1000 face-value coupon bond has a 10% coupon rate, a maturity of 4 years, and a price of $960.

Required:

Question 1: Is the yield to maturity going to be above or below 10%, and why? Calculate the present value of the bond when interest rate is 12%. Must the yield to maturity be above or below 12%, and why?Calculate the present value of the bond when interest rate is 8%. Must the yield to maturity be above or below 8%, and why?

Question 2: Calculate the yield to maturity for this bond at the current price.

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Macroeconomics, Economics

Category:- Macroeconomics
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