finance help 1827537 2
Bond Valuation and Yield | |||||||||||||
A bond has a par value of $1,000, pays $50 semiannually and has a maturity of 10 years. | |||||||||||||
If the bond earns 12% per year, what is the price of the bond? | |||||||||||||
Rate | 12% | ||||||||||||
Nper | 10 | ||||||||||||
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What is the yield to maturity for the bond? | |||||||||||||
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What would be the bond’s price if the rate earned declined to 8% per year? | |||||||||||||
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If the maturity period is reduced to 5 years and the required rate of return is 8%, what would be the price of the bond? | |||||||||||||
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What is the yield to maturity for the bond when the maturity is 5 years and the required rate of return is 8%? | |||||||||||||
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What generalizations about bond prices, interest rates and maturity periods can be made based on the calculations made above? | |||||||||||||
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