A bond has eight years to maturity, a $2,000 face value, and a 6.3% coupon rate with annual coupons. What is its yield...

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Question

A bond has eight years to maturity, a $2,000 face value, and a 6.3% coupon rate with annual coupons. What is its yield to mat

Answer 1

Answer #1

Annual coupon=2000*6.3%=126

Approx Yield to maturity=[Annual coupon+(Face value-Present value)/time to maturity]/(Face value+Present value)/2

=[126+(2000-1639)/8]/(2000+1639)/2

=9.64%(Approx).

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Answer 2

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