(b) If a government bond is expected to mature in two years and has a current price of RM950, calculate the bond's interest rate/yield if it has a par value of RM1,000 and a promised coupon payment rate of 10%. Please give calculation step by step. (c) From part (b) above, illustrate how the bond price/value if the interest rate/yield moves up (increase).

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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(b) If a government bond is expected to mature in two years and has a current price
of RM950, calculate the bond's interest rate/yield if it has a par value of RM1,000
and a promised coupon payment rate of 10%.

Please give calculation step by step.

(c) From part (b) above, illustrate how the bond price/value if the interest rate/yield
moves up (increase).

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