Ask Question
8 May, 22:25

What is the yield to maturity, to the nearest percent, for the following bond: current price is $928, coupon rate is 10 percent, $1,000 par value, interest paid annually, fifteen years to maturity

+5
Answers (1)
  1. 8 May, 22:52
    0
    Yield to maturity 10.87%

    Explanation:

    Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.

    Face value = F = $1,000

    Coupon payment = $1,000 x 10% = $100

    Selling price = P = $928

    Number of payment = n = 15 year

    The coupon rate can be calculated using following formula

    Yield to maturity = [ $100 + ($1,000 - $928) / 15 ] / [ ($1,000 + $928) / 2 ]

    Yield to maturity = $104.8 / $964

    Yield to maturity = 0.1087 = 10.87%
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “What is the yield to maturity, to the nearest percent, for the following bond: current price is $928, coupon rate is 10 percent, $1,000 par ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers