question archive 6) Suppose a 10-year, 5%, semiannual coupon bond with a par value of $1000 is currently selling for $1135
6) Suppose a 10-year, 5%, semiannual coupon bond with a par value of $1000 is currently selling for $1135
Subject:FinancePrice: Bought3
6) Suppose a 10-year, 5%, semiannual coupon bond with a par value of $1000 is currently selling for $1135.90.
(1)what is the implied YTM?
(2)If the bond can be called after 5 years for a price of $1050. What is the yield to call?
(3) If you bought the bond, do you think you would be more likely to earn the YTM or YTC? Why?
7) If Boeing issues a 10 year, $1000 face value bond with a 5% coupon rate, if the YTM=3%, the bond pays the coupon semi-annually. What is the price of Boeing bond is S&P downgrading Boeing rating to BB, and the yield spread between BBB and BB bond is 1%. What is the duration of the bond? How much money do Boeing bond investors lose?
