Question
Assume today is November 1, 2022 and that all bonds pay interest semi-annually with a face value of $1,000. YTM= Current yield + Capital
Assume today is November 1, 2022 and that all bonds pay interest semi-annually with a face value of $1,000. YTM= Current yield + Capital Gains yield; CY= Annual Interest/Current Price Apple is AA rated; AAA Treasuries yield 3-year is 4.50%, 10-year 4.30% 2 Years ago, Apple issued 3.0% coupon paying bonds with a face value of $1000 set to mature on November 1, 2032. The bonds are callable in 1 year at 1050. Concerns over higher inflation have pushed interest rates higher globally. 1. What is yield to maturity for an investor who buys the bonds today at 870 (this is the current price)?
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