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    rachel0438's Avatar
    rachel0438 Posts: 1, Reputation: 1
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    #1

    Nov 6, 2009, 07:31 AM
    Calculate current bond prices
    If I have 9 percent coupon bonds on the market that have 8 years left to maturity and the bonds make annual payments. The yield to maturity (YTM) on these bonds is 7 percent, what is the current bond price?
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #2

    Nov 6, 2009, 09:31 AM
    The price is the PV of the remaining cash flows when discounted at the YTM. You've got 8 remaining coupon payments, plus the maturity payoff--discount those and you're good to go.

    Check back in if you need a bigger push, but you'll need to show your efforts toward the solution for more specific guidance.
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