1. You buy a bond with the following features: 7 years to maturity, face value...
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Finance
1. You buy a bond with the following features: 7 years to maturity, face value of $1000, coupon rate of 2% (annual coupons) and yield to maturity of 2.3%. Just after you purchase the bond, the yield to maturity rises to 4.8%. What is the capital gain or loss on your bond?
2. You own a bond with the following features: 10 years to maturity, face value of $1000, coupon rate of 4% (annual coupons) and yield to maturity of 4.8%. If you expect the yield to maturity to remain at 4.8%, what do you expect the price of the bond to be in two years?
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