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You own a bond with the following features: 10 years to maturity, face value of $1000,...

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Finance

You own a bond with the following features: 10 years tomaturity, face value of $1000, coupon rate of 4% (annual coupons)and yield to maturity of 4.8%. If you expect the yield to maturityto remain at 4.8%, what do you expect the price of the bond to bein two years?

Answer & Explanation Solved by verified expert
4.1 Ratings (547 Votes)
Price of the Bond in two years The Price of the Bond is the Present Value of the Coupon Payments plus the Present Value of the Face ValuePar Value The Price    See Answer
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Transcribed Image Text

You own a bond with the following features: 10 years tomaturity, face value of $1000, coupon rate of 4% (annual coupons)and yield to maturity of 4.8%. If you expect the yield to maturityto remain at 4.8%, what do you expect the price of the bond to bein two years?

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