Soln Ch 13 Bond prices - Texas Christian University

The maturity of each bond is ten years, and we assume that coupons are paid semiannually. Since both bonds are selling at par value, the current yield for each bond is equal to its coupon rate. If the yield declines by 1% to 5% (2.5% semiannual yield), the Sentinal bond will increase in value to $107.79 [n=20; i = 2.5%; FV = 100; PMT = 3]. ................
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