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Consider a one-year $1000 20 coupon bond issued Assume that the bond payoffs are uncertain There is a sos chance that the band warepay its face value in full and a 50% chance that the bond will detalt and you will receive $950. The risk free interest rate is 6%. Because of the uncertainty, investors demand and premium of 23%. What is the yield to maturity? 51,900 ' . 50 % ' 950 $ 6. , 23 % (TM? 1537% 16.80% 10.03% Shadi Kuth . Consider a one-year $1000 Zero-coupon bond issued Assume that the bond payoffs are uncertain There is a sus cance that the band will repay its face value in full and a 50% chance that the bond will detalt and you will receive $950. The risk free interest rate is 6%. Because of the uncertainty, investors demand and premium of 23% What is the yield to maturity? , ? ,1 $ . . 50 % " 50 % 950 $ 6. , 23 % (TM? 1537% 16.80% 10.03%