Use the information in the following table: Type Issue Date Price Coupon Rate Maturity Date YTM Current Yield Rating Bond Feb 1998 123.43 8.50% 2-15-2018 AAA What is the yield to maturity of the February 1998 Treasury bond based on the price in the table? Assume that the bond has a $100,000 par value and makes semiannual coupon payment. What is the current yield of the bond? Why is the current yield higher than the yield to maturity?
Use the information in the following table: Type Issue Date Price Coupon Rate Maturity Date YTM Current Yield Rating Bond Feb 1998 123.43 8.50% 2-15-2018 AAA What is the yield to maturity of the February 1998 Treasury bond based on the price in the table? Assume that the bond has a $100,000 par value and makes semiannual coupon payment. What is the current yield of the bond? Why is the current yield higher than the yield to maturity?
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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Use the information in the following table:
Type Issue Date Price Coupon Rate Maturity Date YTM Current Yield Rating
Bond Feb 1998 123.43 8.50% 2-15-2018 AAA
What is the yield to maturity of the February 1998 Treasury bond based on the price in the table? Assume that the bond has a $100,000 par value and makes semiannual coupon payment. What is the current yield of the bond? Why is the current yield higher than the yield to maturity?
What is the yield to maturity of the February 1998 Treasury bond?
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