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Yield to maturity and Bond Price

A 10-year corporate bond is issued with a face value of $100,000, paying interest of $2,500. semi-annually. If market yields decrease shortly after the T-bond is issued, what happens to the bond's:

a. price?
b. coupon rate?
c. yield to maturity?

Solution Preview

Market yield = Annual interest / Market Price,
Yield to maturity (YTM), is the interest rate by which the ...

Solution Summary

This discusses the relationship between Yield to maturity and Bond Price