There are 2 bonds: A. 9% coupon rate annual payments yield to maturity 6.5%...
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Accounting
There are 2 bonds:
A.
9% coupon rate
annual payments
yield to maturity 6.5%
10 yrs till maturity
par value 1,000
B.
4% coupon rate
annual payments
yield to maturity 6.5%
10 yrs till maturity
par value 1,000
1. What are the current yields of the bonds
2. What are the captial gains of each bond for the next yr with same interest rates
3. What will happen to the captial gains yield if interest rates stay the same for next 10 yrs
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