Problem 10-6 A bond with a maturity of 18 years sells for $1,108. If the coupon
ID: 2779468 • Letter: P
Question
Problem 10-6
A bond with a maturity of 18 years sells for $1,108. If the coupon rate is 7.6 percent, what is the yield to maturity of the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
A bond with a maturity of 18 years sells for $1,108. If the coupon rate is 7.6 percent, what is the yield to maturity of the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Explanation / Answer
Computation of Yield to maturity
YTM =( C + (F-P) / n) / F+P /2
= ( 7.6 + (1000 - 1108 ) / 18) / 1000 + 1108 / 2
= 7.6 -6 / 1054
= 0.15%.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.