The yield to maturity for a bond with maturity of one year, two year, three year and four year are to be determined. Introduction: The annual rate of return which is obtained at the bond which is bought today at current market price and held that bond by investor till it mature is called as Yield to Maturity (YTM). YTM refers an effective annual return from security which expresses the percentage of the current market price of security.

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Chapter 15, Problem 7PS

A

Summary Introduction

To calculate: The yield to maturity for a bond with maturity of one year, two year, three year and four year are to be determined.

Introduction:

The annual rate of return which is obtained at the bond which is bought today at current market price and held that bond by investor till it mature is called as Yield to Maturity (YTM). YTM refers an effective annual return from security which expresses the percentage of the current market price of security.

B

Summary Introduction

To calculate: The forward rate for the second year, third year and fourth year are to be calculated.

Introduction:

The annual rate of return which is obtained at the bond which is bought today at current market price and held that bond by investor till it mature is called as Yield to Maturity (YTM). YTM refers an effective annual return from security which expresses the percentage of the current market price of security.

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