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ch 13 prob 8 Bond A has the following terms (assume annual coupons) coupon rate 10%...

ch 13 prob 8


Bond A has the following terms (assume annual coupons)


coupon rate 10%

principal $1000

term to maturity 8 years

Bond B has the following terms


coupon rate 5%

principal $1000

term to maturity 8 years

What is the price of bond A if interest rates are 10% and five years have gone by? Enter just the number to the nearest dollar, no symbols or commas.


(Hint: think again of the relationship between yield and coupon rate and how that affects bond price)
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