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A bond is selling for $ 1 0 2 9 . The coupon rate is 7 . 8 % . It has 1 8 -

A bond is selling for $1029. The coupon rate is 7.8%. It has 18-years till maturity, with semi-annual compounding. What is the yield-to-maturity (YTM)? calculate the realized compound yield (RCY) with a re-investment rate of 9%. What problem does the RCY correct and why is this important? If the investor believes interest rates are going to increase, is this a good bond choice? Think Price/Yield curve. please show work and steps.

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