Question 10 Estimate the yield-to-maturity of a bond with the parameters given below. Face value Coupon rate $ 1,000.00 11% Cost of capital 11% Years to maturity 5 Timeline 1 2 3 4 Probability of payment 1 1 0.5 0.5 Promissed payments Expected payments PV (payments) Price of bond Yield-to-maturity 5 0.5

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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Question 10
Estimate the yield-to-maturity of a bond with the parameters given below.
Face value
Coupon rate
$ 1,000.00
11%
Cost of capital
11%
Years to maturity
5
Timeline
1
2
3
4
Probability of payment
1
1
0.5
0.5
Promissed payments
Expected payments
PV (payments)
Price of bond
Yield-to-maturity
5
0.5
Transcribed Image Text:Question 10 Estimate the yield-to-maturity of a bond with the parameters given below. Face value Coupon rate $ 1,000.00 11% Cost of capital 11% Years to maturity 5 Timeline 1 2 3 4 Probability of payment 1 1 0.5 0.5 Promissed payments Expected payments PV (payments) Price of bond Yield-to-maturity 5 0.5
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