Question
A two-year bond with par value $1,000 making annual coupon payments of $90 is priced at $1,000. a. What is the yield to maturity of
A two-year bond with par value $1,000 making annual coupon payments of $90 is priced at $1,000.
a. What is the yield to maturity of the bond? (Round your answer to 1 decimal place.)
Yield to maturity %
b. What will be the realized compound yield to maturity if the one-year interest rate next year turns out to be (a) 7.0%, (b) 9.0%, (c) 11.0%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)
| Interest Rate | Realized YTM | |||
| 7.0 | % | % | ||
| 9.0 | % | % | ||
| 11.0 | % | % | ||
|
| ||||
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Money Banking And Financial Markets
Authors: Stephen Cecchetti
2nd Edition
0073523097, 9780073523095
