If the bond has a yield to maturity of 7.8% 1 year from now, what will its price

Question

If the bond has a yield to maturity of 7.8% 1 year from now, what will its price be?

What will be the rate of return on the bond? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

If the inflation rate during the year is 2.6%, what is the real rate of return on the bond? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

25-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 8%.

What is the bond’s yield to maturity if the bond is selling for $1,050? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

What is the bond’s yield to maturity if the bond is selling for $1,250? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

General Matter’s outstanding bond issue has a coupon rate of 9.2%, and it sells at a yield to maturity of 7.60%. The firm wishes to issue additional bonds to the public at face value. What coupon rate must the new bonds offer in order to sell at face value? (Round your answer to 2 decimal places.)

Explanation / Answer

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