Question
In: Finance
A bond's market price is $1,125. It has a $1,000 par value, will mature in 8...
A bond's market price is $1,125. It has a $1,000 par value, will mature in 8 years, and has a coupon interest rate of 8 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 16 years? What if it matures in 4 years?
a. The bond's yield to maturity if it matures in 8 years is (?) % (Round to two decimal places.)
b. The bond's yield to maturity if it matures in 16 years is (?)%.(Round to two decimal places.)
c. The bond's yield to maturity if it matures in 4 years is (?)% (Round to two decimal places.)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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(Yield to maturity) A bond's market price is $900. It has a $1,000 par value, will...
(Yield to maturity) A bond's market price is
$900. It has a $1,000 par value, will mature in 8 years, and
has a coupon interest rate of 8 percent annual interest, but makes
its interest payments semiannually.
What is the bond's yield to maturity? % (Round to two
decimal places.)
What happens to the bond's yield to maturity if the bond
matures in 16 years? % (Round to two decimal places.)
What if it matures in 4 years?...
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price of$1,050.(The bond's first call date is in 5 years.)
Coupon payments are made semiannually (so use semiannual
compounding where appropriate).
a. Find the current yield, YTM, and YTC on this issue, given
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these 3 yields is the highest? Which is the lowest? Which yield
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b. Repeat the 3...
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(See Appendix G.)
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a Calculate the current price of this bond if the market yield
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