A bond has a $1,000 par value, 15 years to maturity, and an 8% annual coupon and sells for $1,080. 1. What is its yield to maturity (YTM)? 2. Assume that the yield to maturity remains constant for the next four years. What will the price be 4 years from today?

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
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A bond has a $1,000 par value, 15 years
to maturity, and an 8% annual coupon and
sells for $1,080.
1. What is its yield to maturity (YTM)?
2. Assume that the yield to maturity
remains constant for the next four
years. What will the price be 4 years
from today?
Transcribed Image Text:A bond has a $1,000 par value, 15 years to maturity, and an 8% annual coupon and sells for $1,080. 1. What is its yield to maturity (YTM)? 2. Assume that the yield to maturity remains constant for the next four years. What will the price be 4 years from today?
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