The price today of a 4-year coupon bond with annual coupons, a coupon rate of 6%, and a face value of $1000, is $1,113.18. Coupons will be paid starting one year from now, up to and including the time when the bond matures, in four years. Calculate the yield to maturity of this coupon bond.
The price today of a 4-year coupon bond with annual coupons, a coupon rate of 6%, and a face value of $1000, is $1,113.18. Coupons will be paid starting one year from now, up to and including the time when the bond matures, in four years. Calculate the yield to maturity of this coupon bond.
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 4P
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The price today of a 4-year coupon bond with annual coupons, a coupon rate of 6%, and a face value of $1000, is $1,113.18. Coupons will be paid starting one year from now, up to and including the time when the bond matures, in four years. Calculate the yield to maturity of this coupon bond.
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