what is the yield to maturity on a 6% semiannual coupon bond with 13 years to...

what is the yield to maturity on a 6% semiannual coupon bond with 13 years to maturity assuming that the current price of the bond is 915.55 and the bond has a par value of 1000

Solutions

Expert Solution

YTM is the return which is expected from the bond if it's held till maturity.

We will use a BA 2 Plus Financial calculator to find the YTM of the bond-

PV(Price of the bond) : 915.55

N(Number of coupon payments in 13 years) : 13*2 = 26

PMT(Coupon payment per 6 months) : 6%*1000/2 = 30

FV(Par value) : 1000

CMPT I/Y

Yield to maturity per 6 months = 3.5%

Yield to maturity per year = 3.5%*2 = 7%

jeff jeffy answered 2 years ago

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