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Question 14 Consider a 5year bond with a 10% coupon rate that has a present...

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Finance

Question 14

Consider a 5year bond with a 10% coupon rate that has a present yield to maturity of 8%. If interest

rates remain constant, one year from now the price of this bond will be _______.

(a) higher

(b) lower

(c) the same

Question 15

Consider a 5year bond with a 10% coupon rate that trades at a premium. The yield to maturity of this

bond must be __________.

(a) Lower than 10%

(b) Higher than 10%

(c) Equal to 10%

(d) Need the face value to determine the yield to maturity

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