An 8% coupon bond with a par value of $100 matures in 6 years and is selling at $95.51 with a yield of 9%. Exactly one year ago this bond sold at a price of $90.26 with a yield of 10%. The bond pays annual interest. The change in price attributable to the change in maturity is closest to: A. $0.54. B. $1.03. C. $4.22. D. $5.25.
how do u figure this one out?
Nevermind figured it out
you calculate the pv of the bond with the same terms as a year ago EXCEPT matures in 6 years. This makes it so that you will only see the difference due to change in maturity fv 100 n 6 i/y 10 pmt 8 cpt pv pv = 91.29 91.29 - 90.26 = 1.03