A bond with an annual coupon of $100 originally sold at par
for $1000. The current yield on the maturity on this bond is 9%. Assuming no
change in risk, this bond would sell at a ______ in order to compensate
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The bond is supposed to sell at $ 1,111 as shown below:
100/0.09=$1,111 in orfdre to compensate the 1% drop ( originally the coupon rate was 10% and at maturity 9%)
in short let the let the bond be x dollars at a rate of 0.09 to give coupon rate of %100
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