What is the yield to maturity of a 5-year, 7.5% coupon rate $1000 par value bond...
What is the yield to maturity of a 5-year, 7.5% coupon rate
$1000 par value bond priced currently at $1,010?
%
Place your answer in percentage form using two decimal places. Do
not use the percent sign as part of your answer.
Homework Answers
YTM=[C+(F-P)/n]/(F+P)/2
where C=coupon payments=($1000*7.5%)=$75
F=face value=$1000
P=present value=$1010
Hence
YTM=[75+(1000-1010)/5]/(1000+1010)/2
=(73/1005)
=0.07264
=7.26 (approx)
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What is the yield to maturity of a 5-year, 7.5% coupon rate
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