Assume that you purchased an 8%, 25-year, $1,000 par, semiannual payment bond priced at $1,016.50 when it has 15 years remaining until maturity. Compute: a. Its promised yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % annually b. L yield to call if the bond is callable in five years with a 9% premium? Do not round intermediate calculations, Round your answer to two decimal places % annually
Assume that you purchased an 8%, 25-year, $1,000 par, semiannual payment bond priced at $1,016.50 when it has 15 years remaining until maturity. Compute: a. Its promised yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % annually b. L yield to call if the bond is callable in five years with a 9% premium? Do not round intermediate calculations, Round your answer to two decimal places % annually
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
Problem 1PS
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Transcribed Image Text:Assume that you purchased an 8%, 25-year, $1,000 par, semiannual payment bond priced at $1,016.50 when it has 15 years remaining until maturity. Compute:
a. Its promised yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places.
% annually
b. yield to call if the bond is callable in five years with a 9% premium? Do not round intermediate calculations. Round your answer to two decimal places.
% annually
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