You are interested in purchasing bonds that are currently priced at $1,150.59 and have 12.5 years...

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Question

You are interested in purchasing bonds that are currently priced at $1,150.59 and have 12.5 years...

You are interested in purchasing bonds that are currently priced at $1,150.59 and have 12.5 years to maturity. The bonds pay semi-annual coupons. If the bonds have a 4% coupon rate what is the yield-to-maturity of these bonds?

Question 42 options:

	4.00%
	2.29%
	Not enough information.
	2.58%
	1.29%

business finance

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Answer 1

Answer #1

The yield to maturity is calculated as follows:-

=RATE(nper,pmt,pv,fv)

=RATE(12.5*2,4%/2*1000,-1150.59,1000)*2

=2.58%

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Answer 2

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