1. A high-yield bond has the following terms: Principal amount $1,000 ...

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1. A high-yield bond has the following terms:             Principal amount  $1,000               Annual Interest Paid  $100               Maturity in years  10                                                 A. What is  the bond's price if comparable debt yields 12% and the bond matures in 10  years?                                                        B. What  would be the price if comparable debt yields 12% and bond matures in 5 years?                                                        C. what are  the current yields and yields to maturity in a and b?           A  B             current yields                 Yields to maturity                                          11.5  11.5               942.5                          D. What would be the bond's price in a and b if  interest rates declined to 9%?

Robert · Accepted Answer

a)let the s.m.date is 01/01/00,then maturity date is 01/01/10 coupon rate -10%,yield to maturity 
12, redemption value 100, no of payments 1 then price(% of par)=88.69955394, price =$887. 
b)let the s.m.date is 01/01/00,then maturity date is 01/01/05 coupon rate -10%,yield to maturity 
12,

1. A high-yield bond has the following terms: Principal amount $1,000 Annual Interest Paid $100 Maturity in years 10 A. What is the bond's price if comparable debt yields 12% and the bond matures in...

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1. A high-yield bond has the following terms:
Principal amount	$1,000
Annual Interest Paid	$100
Maturity in years	10
A. What is the bond's price if comparable debt yields 12% and the bond matures in 10 years?
B. What would be the price if comparable debt yields 12% and bond matures in 5 years?
C. what are the current yields and yields to maturity in a and b?
A	B
current yields
Yields to maturity
11.5	11.5
942.5
D. What would be the bond's price in a and b if interest rates declined to 9%?