Question

1. What is the​ bond's yield to​ maturity?

2. What happens to the​ bond's yield to maturity if the bond matures in 20​ years?

3. What if it matures in 5 ​years?

(Yield to maturity) A bond's market price is $1,200. It has a $1,000 par value, will mature in 10 years, and has a coupon interest rate of 11 percent annual interest, but makes its interest payments semiannually. What is the bonds yield to maturity? What happens to the bond's yield to maturity if the bond matures in 20 years? What if it matures in 5 years? a. The bond's yield to maturity if it matures in 10 years is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. parts 2 remaining Clear All Check Answer Check Answer javascript:doExercise(51;

Answer 1

payment Number of periods Presnt value Pmt Nper Pv Face value Fv YTM if Nper is 5 years If Semi Annual Coupon YTM if Nper is 10 years YTM if Nper is 20 years If Semi Annual Coupon If Semi Annual Coupon Nper Nper 10*2 Nper 20*2 5*2 20 40 10 1000*0.11*1/2 $ 1000 0.11*1/2 1000 0.11*1/2 Pmt Pmt Pmt 55.00 55.00 55.00 (1,200.00) $1,000.00 Pv $(1,200.00) $(1,200.00) $ Pv Pv $ 1,000.00 Fv Fv Fv 1,000.00 RATE(nper,pmt,pv, fv) RATE(20,55,-1200,1000) RATE(nper,pmt,pv,fv) RATE(40,55,-1200,1000) RATE(nper,pmt,pv, fv) RATE (10,55,-1200,1000) Rate Rate Rate Yield to maturity Yield to maturity Yield to maturity Yield to maturity Yield to maturity Yield to maturity Yield to maturity Yield to maturity Yield to maturity 4.03% 4.42% 3.14% 4.03% 2 4.42%*2 3.14%*2 |р.а p.a p.a p.a 8.05% 8.85% 6.28% p.a р.a