A 20-year maturity bond with par value $1.000 makes semiannual coupon payments a
ID: 2634718 • Letter: A
Question
A 20-year maturity bond with par value $1.000 makes semiannual coupon payments at a coupon rate of 9%. a. Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is $940. (Round your intermediate calculations to 4 decimal places. Round your answers to 2 decimal places.) Bond equivalent yield to maturity Effective annual yield to maturity b. Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is $1.000. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Bond equivalent yield to maturity Effective annual yield to maturity c. Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is $1.060. (Round your intermediate calculations to 4 decimal places. Round your answers to 2 decimal places.) Bond equivalent yield to maturity Effective annual yield to maturityExplanation / Answer
a. Using financial calculator, Enter N = 40, FV = 1000, PV = -940, PMT = 45. Press the I/Yr key = 4.84%
Bond equivalent yield to maturity = 4.84%
Related Questions
Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.