Question

A $1,000 par bond with a 5% semi-annual coupon with 10yrs to maturity trades at $977....

A $1,000 par bond with a 5% semi-annual coupon with 10yrs to maturity trades at $977. What is the yield to maturity?

  • A. 4.82%

  • B. 6.11%

  • C. 5.19%

  • D. 5.30%

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Answer #1

Answer is 5.30%

We need Excel or financial calculator to calculate exact YTM.

A В C 1 Par Value 2 Coupon Rate 3 Years to Maturity 4 Current Price 5 Frequency $1,000 5% 10 $977 2 semi-annual 6 7 YTM 5.30%A В с 1 Par Value 1000 2 Coupon Rate 3 Years to Maturity 4 Current Price 5 Frequency 0.05 10 977 semi-annual 2 6 7 YTM -B5*RA

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