Question

8.) What is the yield to maturity of a five​-year, $ 5, 000 bond with a 4.8​% coupon rate and semiannual coupons if this bond is currently trading for a price of $ 4, 785​?

9.) Which of the following bonds is trading at a​ premium?
A.a 15minusyear bond with a​ $10,000 face value whose yield to maturity is​ 8.0% and coupon rate is​ 7.8% APR paid semiannually
B.a tenminusyear bond with a​ $4,000 face value whose yield to maturity is​ 6.0% and coupon rate is​ 5.9% APR paid semiannually
C.a twominusyear bond with a​ $50,000 face value whose yield to maturity is​ 5.2% and coupon rate is​ 5.2% APR paid monthly
D.a fiveminusyear bond with a​ $2,000 face value whose yield to maturity is​ 7.0% and coupon rate is​ 7.2% APR paid semiannually

Answer 1

8)

Function Arguments ? X RATE Nper Pmt 5000*4.8%/2 Pv -4785 Fv 5000 Type o 1 1 1 1 1 = 10 = 120 = -4785 = 5000 = 0 = 0.02901562 Returns the interest rate per period of a loan or an investment. For example, use 6%/4 for quarterly payments at 6% APR. Type is a logical value: payment at the beginning of the period = 1; payment at the end of the period = 0 or omitted. Formula result = 2.90% Help on this function D OK Cancel

Hence, yield to maturity is 5.80% (2.90%*2)

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