A bond has 8 years until maturity, carries a coupon rate of 8%, and sells for $1,100.

Question:

a. What is the current yield on the bond?

b. What is the yield to maturity if interest is paid once a year?

c. What is the yield to maturity if interest is paid semiannually?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...