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Consider the following three corporate bonds that have semiannual compounding: BOND #1 #3 #3 PRICE...

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Consider the following three corporate bonds that have semiannual compounding: BOND #1 #3 #3 PRICE $1000.00 $1067.95 $1098.96 COUPON RATE 8% 9% 9% YEARS TO MATURITY 5 10 20 1. What is the YTM of these 3 bonds? 2. What is NPV of buying bond #1 in the market at the indicated price? 3. What is the return from buying and holding bond #3 till maturity? 4. Suppose that the YTM of these bonds suddenly increased to 9%, what would their new prices be? Are the bond price equally sensitive to this change in YTM? What explains the difference? Consider the following three corporate bonds that have semiannual compounding: BOND #1 #3 #3 PRICE $1000.00 $1067.95 $1098.96 COUPON RATE 8% 9% 9% YEARS TO MATURITY 5 10 20 1. What is the YTM of these 3 bonds? 2. What is NPV of buying bond #1 in the market at the indicated price? 3. What is the return from buying and holding bond #3 till maturity? 4. Suppose that the YTM of these bonds suddenly increased to 9%, what would their new prices be? Are the bond price equally sensitive to this change in YTM? What explains the difference

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