Question
A 20-year, 10 percent semiannual coupon bond, with a par value of $1,000 sells for $1,200 (assume that the bond has just been issued today).
A 20-year, 10 percent semiannual coupon bond, with a par value of $1,000 sells for $1,200 (assume that the bond has just been issued today).
1) What is the bond's yield to maturity?
2) What is the bond's current yield?
3) What is the bond's capital gain or loss yield if the bond is purchased today and sold next year. (Hint: Find the values of the bond today and one year after).
Please show formula and how you find interest rate.
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The Public Private Partnership Handbook
Authors: Malcolm Morley
1st Edition
0749474262, 978-0749474263
