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Current Price of bonds

Consider a bond with a 7% annual coupon and a face value of $1000. Complete the following table
Year to Maturity Yield to Maturity Current Price

3 5 ?
3 7 ?
6 7 ?
9 7 ?
9 9 ?

What relationship do you observe between maturity and discount rate and the current price?

Solution Preview

Consider a bond with a 7% annual coupon and a face value of $1000. Complete the following table
Year to Maturity Yield to Maturity Current Price

3 5 1,054.46
3 7 1,000.00
6 7 1,000.00
9 7 1,000.00
9 ...

Solution Summary

This solution is comprised of a detailed explanation to answer what relationship do you observe between maturity and discount rate and the current price.

$2.19