1. A US Treasury bond with exactly 10 years to maturity and 1% coupon sells...
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1. A US Treasury bond with exactly 10 years to maturity and 1% coupon sells for 101 (per 100 par value). What is the yield to maturity (YTM) of this bond? All US Treasury bonds pay coupon semi- annually. 2. For the question above, after you buy the bond, if interest rates rise instantaneously by 100 basis points (bps), what will be the new price of the bond? Before you solve it think about how bond prices move with interest rate changes
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