The current price of a 10-year U.S. Treasury Bond with 5 years to maturity and a...

The current price of a 10-year U.S. Treasury Bond with 5 years to maturity and a 4% coupon is $1,180. Assuming the usual maturity value of $1,000 and semi-annual coupon payments, what is the Yield to Maturity (YTM) for this bond

Expert Solution

Calculations-

Here,
Fv is the Future value of the bond
rate is the periodic interest rate
nper is no. of periods
pmt is the periodic coupon payments
Pv is the current rate of bond
type = 0 if the amount is paid at the end of the year ,1 if it is paid at the beginning.

As no method was mentioned I have solved the problem using excel function.

Please upvote if the answer is helpful.In case of doubt,do comment.Thanks.

jeff jeffy answered 3 years ago

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