3 You are considering the purchase of a Pure Discount Bond with a Face Value of $10,000, which matures in 78 days. In the markets this bond is selling for $9,927.78. If you purchase t Yield-to-Maturity (YTM) on the investment? (The answer is a percent, round your answer to two decimal places, e.g. 4.75) Numeric Response
3 You are considering the purchase of a Pure Discount Bond with a Face Value of $10,000, which matures in 78 days. In the markets this bond is selling for $9,927.78. If you purchase t Yield-to-Maturity (YTM) on the investment? (The answer is a percent, round your answer to two decimal places, e.g. 4.75) Numeric Response
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:3:54
You are considering the purchase of a Pure Discount Bond with a Face Value of $10,000, which matures in 78 days. In the markets this bond is selling for $9,927.78. If you purchase the bond at this price what is the
Yield-to-Maturity (YTM) on the investment? (The answer is a percent, round your answer to two decimal places, e.g. 4.75)
Numeric Response
Expert Solution
Step 1: Define= Bonds
Bonds are kind of loan which are issued at discount and that discount is the rate of return realized on bond when bond is held till period of maturity of bond.
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