If a bond with a face value of $1,000 pays an annual coupon of $50 and is currently selling for $920, what is the bond's yield to maturity (YTM) if it matures in 10 years? (Choose the closest approximation) a) 5.5% b) 6.0% c) 6.5% d) 7.0%

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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If a bond with a face value of $1,000 pays an annual coupon
of $50 and is currently selling for $920, what is the bond's
yield to maturity (YTM) if it matures in 10 years? (Choose
the closest approximation)
a) 5.5%
b) 6.0%
c) 6.5%
d) 7.0%
Transcribed Image Text:If a bond with a face value of $1,000 pays an annual coupon of $50 and is currently selling for $920, what is the bond's yield to maturity (YTM) if it matures in 10 years? (Choose the closest approximation) a) 5.5% b) 6.0% c) 6.5% d) 7.0%
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