price of the bond

price of the bond

Consider a $1,000 face value bond that sells for an initial price of $450. It will pay no coupons for the first 10 years and will then pay 6.25% coupons for the remaining 20 years. Write down an equation showing the relationship between the price of the bond, the coupon (in dollars), and the yield to maturity. You don’t have to show every term in the expression, but be sure to show enough terms to demonstrate that you understand the relationship.
price of the bond

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