A bond with a face value of $1,000 has 16 years until maturity, has a coupon rate of 7.8%, and sells for $1,071. a. What is the current yield on the bond? (Enter your answer as a percent rounded to 2 decimal places.) Current yield | % b. What is the yield to maturity if interest is paid once a year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.) Yield to maturity |% c. What is the yield to maturity if interest is paid semiannually? (Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.) Yield to maturity %

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 with a face value of $1,000 has 16 years until maturity, has a coupon rate of 7.8%, and sells for $1,071.
a. What is the current yield on the bond? (Enter your answer as a percent rounded to 2 decimal places.)
Current yield
%
b. What is the yield to maturity if interest is paid once a year? (Do not round intermediate calculations. Enter your answer as a
percent rounded to 4 decimal places.)
Yield to maturity
%
c. What is the yield to maturity if interest is paid semiannually? (Do not round intermediate calculations. Enter your answer as a
percent rounded to 4 decimal places.)
Yield to maturity
%
Transcribed Image Text:A bond with a face value of $1,000 has 16 years until maturity, has a coupon rate of 7.8%, and sells for $1,071. a. What is the current yield on the bond? (Enter your answer as a percent rounded to 2 decimal places.) Current yield % b. What is the yield to maturity if interest is paid once a year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.) Yield to maturity % c. What is the yield to maturity if interest is paid semiannually? (Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.) Yield to maturity %
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