Assume a bond with a remaining maturity of 3 years a. If the face value is $10,000 and coupon payments are $500 per year. What would the price of this bond be if the yield to maturity is 6%? b. Given your answer in (a), is the coupon rate greater, equal, or less than the yield to maturity? Why

Assume a bond with a remaining maturity of 3 years a. If the face value is $10,000 and coupon payments are $500 per year. What would the price of this bond be if the yield to maturity is 6%? b. Given your answer in (a), is the coupon rate greater, equal, or less than the yield to maturity? Why

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: The Basic Tools Of Finance

Section: Chapter Questions

Problem 1CQQ

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Assume a bond with a remaining maturity of 3 years
a. If the face value is $10,000 and coupon payments are $500 per year. What would the price of this bond be if the yield to maturity is 6%?
b. Given your answer in (a), is the coupon rate greater, equal, or less than the yield to maturity? Why?

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