Homework Assignment – Week 2

a. The coupon rate must be 8% because the bonds were issued at par value. with a yield to maturity of 8%. Now, the price is. 40 × Annuity factor(7%, 16 periods) + 1000/1.0716 = $716.60. b. The investors pay $716.60 for the bond. They expect to receive the promised coupons plus $800 at maturity. We calculate the yield to maturity based on these ... ................
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