Question

14. value: 10.00 points You did not receive full credit for this questi A 20-year maturity bond with par value of $1,000 makes annual coupon payments at a coupon rate of 10%. Find the bond equivalent and effective annual yield to maturity of the bond for the following bond prices. (Round your answers to 2 decimal places. Omit the "%" sign in your response.) Effective Annual Yield to Maturity Bond Prices a. $ 930 b. $1,000 c. $1,030 Bond Equivalent Annual Yield to Maturity 10.86 % 10.00 % 9.66 %

Answer 1

А 1 Effective annual yield to maturity (EAY) 2 $ 930 Bond equivalent annual yield to maturity (YTM) 10.86% =RATE (20*2,100/2,-930,1000,0)*2 11.16% =(1+RATE(20*2,100/2,-930,1000,0))^2-1 5 $1,000 10.00% 10.25% =RATE(20*2,100/2,-1000,1000,0)*2 =(1+RATE(20*2,100/2,-1000,1000,0))^2-1 8 $1,030 9.66% 9.89% 9 =RATE(20*2,100/2,-1030,1000,0)*2=(1+RATE(20*2,100/2,-1030,1000,0))^2-1)

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