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 1 year ago

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