ach.7-Homework Prob X+ No results Options M d on page a6 Check my work mode : Th

Question

ach.7-Homework Prob X+ No results Options M d on page a6 Check my work mode : This shows what is correct or incorrect for the work you have completed so far. t d 4 A 6 60 percent coupon bond with 10 years left to matunty s pnced to offer a yieid to maturity of 82 percent You belleve that in one year, the yield to maturity will be 8.0 percent. What is the change in price the bond will experience in dollars? (Do not round intermediate colculations. Round your final answer to 2 decimal places) points 3 Answer is complete but not entirely correct S1854

Explanation / Answer

N = 10*2, FV = 1000, rate = 8.2%/2, PMT = 66

use PV fucntion in Excel

price today = 892.23

N = 9*2, FV = 1000, rate = 8%/2, PMT = 33

use PV function

Price in a year = 911.38

change = 19.15

I have used semi annual compounding instead of annual

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