4. A bond maturing in 12 years has a coupon of 6% and a par value of $1,000. If you purchase the bond for $1,100.00: a. What is your current yield? Current yield = annual coupon payment / bonds current selling price Annual coupon payment: 1000 *6% = 60 Current yield: $60 / $1,100 = 0.0545 = 5.45% b. What is your yield to maturity?

A bond maturing in 12 years has a coupon of 6% and a par value of $1,000. If you purchase the bond for $1,100.00 : a. What is your current yield? Current yield = annual coupon payment / bonds current selling price Annual coupon payment: 10006%=60 Current yield: $60/$1,100=0.0545=5.45% b. What is your yield to maturity? A bond maturing in 12 years has a coupon of 6% and a par value of $1,000. If you purchase the bond for $1,100.00 : a. What is your current yield? Current yield = annual coupon payment / bonds current selling price Annual coupon payment: 10006%=60 Current yield: $60/$1,100=0.0545=5.45% b. What is your yield to maturity