Question
Consider the following information form September 15th, 2012 for a coupon bond with face valueof $1000 and maturity on September 15th, 2014: Coupon rate: 5%
Consider the following information form September 15th, 2012 for a coupon bond with face valueof $1000 and maturity on September 15th, 2014:
Coupon rate: 5%
Price: %955.11
YTM: 7.5%
a) What was the bond current yield?
b) Why is the bond's yield to maturity greater than its coupon rate?
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Finance For Managers
Authors: E. Martinez Abascal
1st Edition
0077140079, 9780077140076
