Do the Math 14-6 Yield, Price, and YTM A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $990 and it now selling for $1,020. a. What is its current yield? Round your answer to one decimal place. 9.70 b. What will be its selling price in two years if comparable màrket interest rates drop 1.9 percentage points? (Hint: Use Appendix A-2 and Appendix A-4 or the Garman/Forgue companion website.) Round Present Value of a Single Amount and Present Value of Series of Equal Amounts in intermediate calculations to fou decimal places. Round your answer to the nearest cent. %
Do the Math 14-6 Yield, Price, and YTM A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $990 and it now selling for $1,020. a. What is its current yield? Round your answer to one decimal place. 9.70 b. What will be its selling price in two years if comparable màrket interest rates drop 1.9 percentage points? (Hint: Use Appendix A-2 and Appendix A-4 or the Garman/Forgue companion website.) Round Present Value of a Single Amount and Present Value of Series of Equal Amounts in intermediate calculations to fou decimal places. Round your answer to the nearest cent. %
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:Do the Math 14-6
Yield, Price, and YTM
A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $990 and it now
selling for $1,020.
a. What is its current yield? Round your answer to one decimal place.
9.70
b. What will be its selling price in two years if comparable màrket interest rates drop 1.9 percentage points?
(Hint: Use Appendix A-2 and Appendix A-4 or the Garman/Forgue companion website.) Round Present
Value of a Single Amount and Present Value of Series of Equal Amounts in intermediate calculations to four
decimal places. Round your answer to the nearest cent.
%
$
c. Calculate the bond's YTM using Equation 14.5 or the Garman/Forgue companion website. Round your
answer to two decimal places.
%
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