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?
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
Section: Chapter Questions
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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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Feb9a676d-fe85-4d74-88bf-ad0967d6081b%2F41aa6b27-a4bf-4446-bde0-822e094b7d48%2F2oadvs_processed.jpeg&w=3840&q=75)
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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