Question
In: Finance
A zero-coupon bond with face value $1,000 and maturity of four years sells for $737.22. a....
A zero-coupon bond with face value $1,000 and maturity of four
years sells for $737.22.
a. What is its yield to maturity?
(Round your answer to 2 decimal places.)
b. What will the yield to maturity be if the price falls to $721?
Solutions
Expert Solution
a
| Calculator | |
| Inputs: | |
| PV | (737.220) |
| PMT | - |
| FV | 1,000.00 |
| N | 4 |
| Output: | |
| I/Y = IRR | 7.92% |
Answer is:
7.92%
b
| Calculator | |
| Inputs: | |
| PV | (721.000) |
| PMT | - |
| FV | 1,000.00 |
| N | 4 |
| Output: | |
| I/Y = IRR | 8.52% |
Answer is:
8.52%
please rate.
jeff jeffy answered 2 years agoRelated Solutions
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