(Q2 IN TYPE B)WHAT IS THE YIELD TO MATURITY OF A BOND WITH THE FOL...

Question

12. (Q2 in TYPE B)What is the yield to maturity of a bond with the following characteristics? Coupon rate is 8% with semi-annual payments, current price is $960, three years until maturity. A) 2.39% B) 4.78% C) 9.57%  D) 12.17% Solution: C Using your calculator: PMT = $40, PV = - 960, 4.125, n = 3 x 2 = 6, FV=$1000, COMP i Æ i = 4.7826 x 2= 9.567

Answer

12. (Q2 in TYPE B)What is the yield to maturity of a bond with the following characteristics? Coupon rate is 8% with semi-annual payments, current price is $960, three years until maturity. A) 2.39% B) 4.78% C) 9.57%  D) 12.17% Solution: C Using your calculator: PMT = $40, PV = - 960, 4.125, n = 3 x 2 = 6, FV=$1000, COMP i Æ i = 4.7826 x 2= 9.567

(Q2 IN TYPE B)WHAT IS THE YIELD TO MATURITY OF A BOND WITH THE FOL...

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