At $1,000 par value, 10 percent coupon bond matures in 15 years. If the price of

Question

At $1,000 par value, 10 percent coupon bond matures in 15 years. If the price of the bond is $1,200,what is the yield to maturity on the bond? Assume interest is paid annually. At $1,000 par value, 10 percent coupon bond matures in 15 years. If the price of the bond is $1,200,what is the yield to maturity on the bond? Assume interest is paid annually. At $1,000 par value, 10 percent coupon bond matures in 15 years. If the price of the bond is $1,200,what is the yield to maturity on the bond? Assume interest is paid annually.

Explanation / Answer

Face value (FV) $                                  1,000.00 Coupon rate 10.00% Number of compounding periods per year 1 Interest per period (PMT)                                          100.00 Bond price (PV) $                               (1,200.00) Number of years to maturity 15 Number of compounding periods till maturity (N) 15 Bond Yield to maturity RATE(NPER,PMT,PV,FV) Bond Yield to maturity 7.71%

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