You Purchased 10 Year Bonds At An Issue Price Of 990 Whose Face Value Is 1000 The An 2847433

  1. You purchased 10 year bonds at an issue price of $990 whose face value is $1000. The annual coupon rate is 3%.

    1. What is the YTM?
    2. Five years later market rates of interest are 5%. What will be the price of the bonds?
    3. If you expect interest rates to hold at 5% or less, what should you do with the bonds?

Prof. Angela


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