ent 6 ezto.mheducation.com/hm.tpx Suppose the following bond quotes for IOU Corp
ID: 2792953 • Letter: E
Question
ent 6 ezto.mheducation.com/hm.tpx Suppose the following bond quotes for IOU Corporation appear in the financial page of today's newspaper Assume the bond has a face value of $1,000 and the current date is April 15, 2016. (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Company EST Vol (Ticker) Coupon Maturity Last Price Last Yield EST Spread UST (000s) OU (IOU) 6.9 Apr 15, 2026 108.27 477 10 1,977 What is the yield to maturity of the bond? YTM What is the Equivalent Government Bond Yield? Bond yield References eBook & Resources Learning Objective 07-04 How bond prices are quoted Worksheet Check my work Type here to search ip 164Explanation / Answer
use financial calculator
FV=1000
PV=-1000*108.27%=-1082.70
N=10*2=20 semi annual periods
PMT=1000*6.9%/2=34.5
Click CPT
Click 1/Y=2.8993% per semi annual
yield to maturity=2.8993%*2=5.80%
Equivalent government bond yield=(1+2.8993%)^2-1=5.88%
the above is the answer
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