A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 7.4%. (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 $910? Yield to maturity b. What is the yield to maturity if the bond is selling for $1,000? Yield to maturity % Yield to maturity % c. What is the yield to maturity if the bond is selling for $1,115? %

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 7.4%. (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 $910?
Yield to maturity
b. What is the yield to maturity if the bond is selling for $1,000?
Yield to maturity
c. What is the yield to maturity if the bond is selling for $1,115?
Yield to maturity
Transcribed Image Text:A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 7.4%. (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 $910? Yield to maturity b. What is the yield to maturity if the bond is selling for $1,000? Yield to maturity c. What is the yield to maturity if the bond is selling for $1,115? Yield to maturity
Bond A is a 10-year U.S. Treasury bond. Bond B is a 10-year corporate bond. State whether the following statements are true or
false?
a.
If you hold bond A to maturity, your return will be equal to the yield to maturity.
b. If you hold bond B to maturity, your return will be equal to or less than the yield to maturity.
c. If you hold bond A for 5 years and then sell it, your return could be greater than the yield to maturity.
Transcribed Image Text:Bond A is a 10-year U.S. Treasury bond. Bond B is a 10-year corporate bond. State whether the following statements are true or false? a. If you hold bond A to maturity, your return will be equal to the yield to maturity. b. If you hold bond B to maturity, your return will be equal to or less than the yield to maturity. c. If you hold bond A for 5 years and then sell it, your return could be greater than the yield to maturity.
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