Problema bond has 8 years until maturity a coupon rate of 8, Ask an Expert

Accounting

Problem:

A bond has 8 years until maturity, a coupon rate of 8%, and sells for $1,100.

Required:

Question 1: If the bond has a yield to maturity of 8% 1 year from now, what will its price be?

Question 2: What will be the rate of return on the bond?

Question 3: If the inflation rate during the year is 3%, what is the real rate of return on the bond?

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91169012

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