DDJ just issued an 8-year bond. The bond makes semi-annual coupon payments based on annual coupon...

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Question

DDJ just issued an 8-year bond. The bond makes semi-annual coupon payments based on annual coupon...

DDJ just issued an 8-year bond. The bond makes semi-annual coupon payments based on annual coupon rate of 6%. If the bond is trading at $1,125.25, what is the bond’s yield to maturity?

Question 32 options:

	2.07%
	2.01%
	5.14%
	5.97%
	None of the above

business finance

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Answer 1

Answer #1

Bond's yield to maturity is calculated as:-

=RATE(nper,pmt,pv,fv)

=RATE(8*2,6%/2*1000,-1125.25,1000)*2

=4.14%

Thus the answer is e) None of the above

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Answer 2

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