An investor buys a 20-year, 10% semi-annual bond for $900. She wants to sell the bond in 6 years when she estimates yields will be 10%. What is the estimate of the future price? A) $1,000. B) $946. C) $1,079. D) $1,152. Can somebody explain this?

A bond would be sold at the YTM dictated by the market (otherwise, nobody would buy it). Since coupon = YTM at the time of sell, the bond would have a price=face value, A must be the answer.

Note: Don’t get confused by “bond future” here. This has nothing to do with the derivative “bond future”.

My thoughts exactly. Re: map1’s post.