Answer to Question #138128 in Finance for jenny

Question #138128

What is the effective annual yield of a $1000 par value bond that pays semi-annual coupons, has an annual coupon rate of 5% with a current trading price of $950 and a time to maturity of 10 years? What will happen to the value of the bond if the YTM falls by 1%? Will it trade at a discount, par or premium? (Round to the nearest percent).

                                                                   


1
Expert's answer
2020-10-15T03:04:39-0400



YTM=5.66 %

 5.74%


if it falls by one percent, then

Will it trade at a premium


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