A bond has $1,000 par value, 20 years to maturity, a 8% annual coupon and sells for $925.00. What is the yield to maturity?
Annual coupon=1000*8%=80
Approx Yield to maturity=[Annual coupon+(Face value-Present value)/time to maturity]/(Face value+Present value)/2
=[80+(1000-925)/20]/(1000+925)/2
which is equal to
=8.81%(Approx).
A bond has $1,000 par value, 20 years to maturity, a 8% annual coupon and sells...
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