5 A 30-year maturity bond with face value of $1,000 makes semiannual coupon paym
ID: 2816267 • Letter: 5
Question
5 A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 9%. (Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places.) a. What is the yield to maturity if the bond is selling for $950? 12.5 points Yield to maturity 03:35:03 eBook Print References b. What is the yield to maturity if the bond is selling for $1,000? Yield to maturty%6 c. What is the yield to maturity if the bond is selling for $1,115? Yield to maturityExplanation / Answer
1.
FV=1000
PV=-950
PMT=1000*9%/2=45
N=30*2=60
CPT I/Y=4.75%
ytm=2*4.75%=9.50%
2.
FV=1000
PV=-1000
PMT=1000*9%/2=45
N=30*2=60
CPT I/Y=4.50%
ytm=2*4.50%=9%
3.
FV=1000
PV=-1115
PMT=1000*9%/2=45
N=30*2=60
CPT I/Y=4%
ytm=2*4%=8%
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