Question

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A bond with a 10% annual coupon matures in 6 years. The bond has a price...

A bond with a 10% annual coupon matures in 6 years. The bond has a price of $1,200. What is the yield to maturity for this bond?

Question 3 options:

2.99%

5.94%

5.98%

7.42%

Solutions

Expert Solution

FV = $1,000
PV = $1,200
Nper = 6
PMT = 1000 * 10% = 100

Yield to maturity can be calculated by using the following excel formula:
=RATE(nper,pmt,pv,fv)
=RATE(6,100,-1200,1000)
= 5.94%


Yield to maturity = 5.94%

jeff jeffy answered 2 years ago
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