How did we find the price in one year 1193.69??

Current Yield vs. Yield to Maturity Current Yield annual coupon / price Yield to maturity = current yield + capital gains yield Example: 10% coupon bond, with semiannual coupons, face value of 1,000, 20 years to maturity, $1,197.93 price -Current yield 100 / 1,197.93 .0835 8.35% - Price in one year, assuming no change in YTM- 1,193.68 - Capital gain vield (1,193.68-1,197.93)/ 1,197.93 .0035 -35 YTM-8.35-.35 computed earlier 8%, which is the same YTM 7-14 u may wish to discuss the components of required returns for bonds in a fashion analogous to the stock return discussion in the next chapter. As with common