A​ bond's market price is ​$1,125. It has a ​$1,000 par​ value, will mature in 6 ​years, and has a coupon interest rate of 11 percent annual​ interest, but makes its interest payments semiannually. What is the​ bond's yield to​ maturity? What happens to the​ bond's yield to ma

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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​(Yield to​ maturity)  A​ bond's market price is
​$1,125.
It has a
​$1,000
par​ value, will mature in
6
​years, and has a coupon interest rate of
11
percent annual​ interest, but makes its interest payments semiannually. What is the​ bond's yield to​ maturity? What happens to the​ bond's yield to maturity if the bond matures in
12
​years? What if it matures in
3
​years?
 
 
 

Question content area bottom

Part 1
a.  The​ bond's yield to maturity if it matures in
6
years is
enter your response here​%.
​ (Round to two decimal​ places.)
Part 2
b.  The​ bond's yield to maturity if it matures in
12
years is
enter your response here​%.
​ (Round to two decimal​ places.)
Part 3
c.  The​ bond's yield to maturity if it matures in
3
years is
enter your response here​%.
​ (Round to two decimal​ places.)
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