Bond Price
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A 25-year, $1,000 par value bond has an 8.5% annual coupon. The bond currently sells for $875. If the yield to maturity remains at its current rate, what will the price be 5 years from now?
a. $839.31
b. $860.83
c. $882.90
d. $904.97
e. $927.60
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Solution Summary
The solution explains how to calculate the bond value in 5 years.
Solution Preview
We first find the current YTM. YTM is the discounting rate that will make the present value of ...
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