Yield to maturity and Bond Price
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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?
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Solution Summary
This discusses the relationship between Yield to maturity and Bond Price
Solution Preview
Market yield = Annual interest / Market Price,
Yield to maturity (YTM), is the interest rate by which the ...
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