A 10-year bond that has a 12 percent coupon rate is currently selling for $1,000, which...
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A 10-year bond that has a 12 percent coupon rate is currently selling for $1,000, which equals the bond's face value. If interest is paid semiannually, the bond's yield to maturity is (a) equal to 12%. (b) greater than 12%. (c) less than 12%. (d) More information is needed to answer this question. (e) None of the above is correct. |
Homework Answers
Time duration of bond = 10 years
coupon = 12%
Current value = face value = $1000
This is possible if coupon rate = bond's yield to maturity
Bond Ytm a. Equal to YTM
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