Question

A 20-year maturity bond with face value of $1,000 makes annual coupon payments and has a coupon rate of 6% a. What is the bond's yield to maturity if the bond is selling for $1,080? (Do not round intermediate calculations. Round your answer to 3 decimal places.) % Yield to maturity b. What is the bond's yield to maturity if the bond is selling for $1,000? Print Yield to maturity ferences c.What is the bond's yield to maturity if the bond is selling for $1,280? (Do not round intermediate calculations. Round your answer to 3 decimal places.) Yield to maturity %

Answer 1

1)

Coupon = 0.06 * 1000 = 60

Yield to maturity = 5.34%

Keys to use in a financial calculator:

FV 1000

PMT 60

PV -1080

N 20

CPT I/Y

2)

Coupon = 0.06 * 1000 = 60

Yield to maturity = 6.00%

Keys to use in a financial calculator:

FV 1000

PMT 60

PV -1000

N 20

CPT I/Y

32)

Coupon = 0.06 * 1000 = 60

Yield to maturity = 3.95%

Keys to use in a financial calculator:

FV 1000

PMT 60

PV -1280

N 20

CPT I/Y