Homework Answers
Answer a.
Face Value = $1,000
Annual Coupon Rate = 6.00%
Annual YTM = 6.00%
Coupon rate is equal to yield-to-maturity, so current price is equal to face value.
Current Price = $1,000
Answer b.
The bonds of Natural Gas Producers Inc. are selling at par.
Answer c.
Current Yield = Coupon Rate
Current Yield = 6.00%
Answer d.
Capital Gain Yield = Yield-to-Maturity - Current Yield
Capital Gain Yield = 6.00% - 6.00%
Capital Gain Yield = 0.00%
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