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Bond A has the following features:          Face value = $1,000,        Coupon Rate = 9%,        Maturity...

Bond A has the following features:

         Face value = $1,000,       

Coupon Rate = 9%,       

Maturity = 6 years, Yearly coupons

         The market interest rate is 5.34%

If interest rates remain at 5.34%, what is the percentage capital gain or loss on bond A if you sell the bond in year 1?

State your answer to 2 decimal places (e.g., 3.56, 0.29)

If there is a capital loss make sure to include a negative sign in your answer (e.g., -0.23)

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Answer #1

Calc:

Where,

rate is periodic YTM,

nper is periods to maturity

pmt is payment per period

fv is redemption amount of bond

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