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Please show work. Consider a bond selling at par ($1000) with a coupon...

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Accounting

Please show work.
Consider a bond selling at par ($1000) with a coupon rate of 6% and 10 years to maturity. (Assuming
semi-annual coupon payments)
(a) What is the price of this bond if the required yield is 8%?
(b) What is the price of this bond if the required yield increases from 8% to 9%, and by what
percentage
did the price of this bond change?
Twitchy - a kind of junk bond - carries a 10% coupon rate, has a $1,000 face value and matures in 5
years. What is the change in the implicit required return (that is, YTM) of Twitchy, if the current
market price of Twitchy, which is $950, falls to $850?
a.-4.10%
b.+2.96%
c.+11.34%
d.-14.30%
Consider a bond with a 10% coupon rate and a yield to maturity of 8%. If the bond's YTM
remains constant, then in one year, the bond price will be (higher, lower) because this is a
(discount, premium) bond.
a. higher, premium
b. higher, discount
c. lower, premium
d. lower, discount
Which bond would most likely possess the highest degree of interest rate risk?
a.8% coupon rate, 10 years to maturity
b.8% coupon rate, 20 years to maturity
c.10% coupon rate, 10 years to maturity
d.10% coupon rate, 20 years to maturity
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