(Yield to maturity) A bond's market price is $775. It has a $1,000 par value, will mature in 10 years, and has a coupon interest rate of 9 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 20 years? What if it matures in 5 years? a. The bond's yield to maturity if it matures in 10 years is %. (Round to two decimal places.) b. The bond's yield to maturity if it matures in 20 years is %. (Round to two decimal places) c. The bond's yield to maturity if it matures in 5 years is. (Round to two decimal places)

(Yield to maturity) A bond's market price is $775. It has a $1,000 par value, will mature in 10 years, and has a coupon interest rate of 9 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 20 years? What if it matures in 5 years? a. The bond's yield to maturity if it matures in 10 years is %. (Round to two decimal places.) b. The bond's yield to maturity if it matures in 20 years is %. (Round to two decimal places) c. The bond's yield to maturity if it matures in 5 years is. (Round to two decimal places)

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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Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

Question

(Yield to maturity) A bond's market price is $775. It has a $1,000 par value, will mature in 10 years, and has a coupon interest rate of 9 percent annual interest, but
makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 20 years? What if it
matures in 5 years?
a. The bond's yield to maturity if it matures in 10 years is%. (Round to two decimal places.)
b. The bond's yield to maturity if it matures in 20 years is %. (Round to two decimal places)
c. The bond's yield to maturity if it matures in 5 years is%. (Round to two decimal places.)

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