Question
An investor is considering purchasing a bond with a 7.83 percent coupon interest rate, a par value of $1,000, and a market price of $870.83.
An investor is considering purchasing a bond with a 7.83 percent coupon interest rate, a par value of $1,000, and a market price of $870.83. The bond will mature in nine years. Based on this information, answer the following questions:
a. What is the bond's current yield?
b. What is the bond's approximate yield to maturity?
c. What is the bond's yield to maturity using a financial calculator?
Note: Assume coupon payments are paid annually
a. The bond's current yield is 8.99%. (Round to two decimal places.)
b. The bond's approximate yield to maturity is _______%.(Round to two decimal places.)
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