Homework Answers
a.
current yield
=(1000*8%)/960
=8.33%
b.
yield to maturity using excel function
=RATE(nper,pmt,pv,fv)
=RATE(10,1000*8%,-960,1000)
=8.61%
c.
investor price using excel function
=PV(rate,nper,pmt,fv)
=PV(9%,10,-1000*8%,-1000)
=935.82
d.
She should not invest because the price of 960 is higher than the investor price of 935.82
the above is answer..
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