Question

What is the yield to maturing for a 6% coupon bond, with semi-annual payments, with 15 years remaining to maturity and selling at a price of $912.36?

Answer 1

	Par Value	Coupon interest Rate	Coupon Amount
Coupon amount =	$          1,000	6%	$                         60
Yield to Maturity of Bonds = ( C + ( F - P) / n ) / (F + P ) /2
Coupon =	$                60
F = Par Value =	$          1,000
P = Market price =	$              912
n = Years to Maturity =	15
Yield to Maturity of Bonds = ( $ 60 + ($ 1000 - $ 912) / 15 ) /   ($ 1000 + $ 912 ) /2
Yield to Maturity of Bonds = ( $ 60 + 5.84 ) / $ 956.18
Yield to Maturity of Bonds = $ 65.84 / $ 956.18
Yield to Maturity of Bonds = 0.0689 or 6.89%
Answer = 6.89%