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# Calculate: Bond Yields and Pricing

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1. A bond with a face value of \$1,000 has a current yield of 7 percent and a coupon rate of 8 percent. What is the bond's price?
2. A 6-year Circular File bond pays interest of \$80 annually and sells for \$950. What are its coupon rate current yield and yield to maturity?

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1. A bond with face value \$1,000 has a current yield of 7 percent and a coupon rate of 8 percent. What is the bond's price?

Current yield = Annual interest / Price
Annual interest = Coupon rate x Face Value = 8% x \$1000 = \$80.00
Current yield = 7%
Therefore price = Annual interest / Current yield = \$80/7% = \$1,142.86

2. A 6-year Circular File bond pays interest of \$80 annually and sells for \$950. What ...

#### Solution Summary

This solution is comprised of a very detailed, step by step response illustrating how to solve for both the price of a bond and the yield of a bond currently and to maturity. All calculations are provided.

\$2.49