Suppose a ten-year, $ 1 comma 000 bond with an 8.6 % coupon rate and semiannual coupons is trading for $ 1 comma 035.77. 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 9.9 % APR, what will be the bond's price? a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding) ? The bond's yield to maturity is nothing %. (Round to two decimal places.)

a. 8.30 %

b. $918.65

c. 16,60%

Explanation:

a. What is the bond's yield to maturity

Using a Financial Calculator Enter the following respective values and find i.

N = 10*2 = 20

Pmt = $1,000 * 8.6 % / 2 = $43

P/yr = 2

Pv = $ 1,035.77

Fv = $1,000

YTM / i = ?

i = 8.30%

Therefore yield to maturity is 8.30 %

b. What will be the bond's price

Using a Financial Calculator Enter the following respective values and find Pv.

N = 10*2 = 20

Pmt = $1,000 * 8.6 % / 2 = $43

P/yr = 2

Fv = $1,000

YTM / i = 9.90%

Pv = ?

Pv = $ 918.65

Therefore the bond's price is $918.65

c. What is the bond's yield to maturity

bond's yield to maturity - expressed as an APR = 8.30 % * 2

= 16,60%