Homework Answers
1.
Price of the
bond=8%*1000/1.09+8%*1000/1.08^2+8%*1000/1.065^3+8%*1000/1.06^4+8%*1000/1.04^5+1000/1.04^5=1159.26
2.
Using financial calculator
N=5
PMT=8%*1000=80
FV=1000
PV=-1159.26
CPT I/Y=4.38%
Hence, Yield to maturity YTM is 4.38%
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