What is the bond price

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Reference no: EM13672228

A bond has the following terms:

principal amount $1,000
semi-annual interest $50
maturity 10 years

a. What is the bond's price if comparable debt yields 12%?
b. What would be the price if comparable debt yields 12% and the bond matures after five years?
c. What are the current yields and yields to maturity in a. and b.?
d. What would be the bond's price in a. and b. if interest rates declined to 8%?
e. What are the current yields and yield to maturity in d.?
f. What two generalizations may be drawn from the above price changes?

Reference no: EM13672228

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