Question
Problem 4 Consider a semi-annual bond with an annual coupon = 11.0% , maturity = 18 years, par value = $1,000, and a market price
Problem 4
Consider a semi-annual bond with an annual coupon = 11.0% , maturity = 18 years, par value = $1,000, and a market price today = $1,169:
a. What is its yield to maturity (YTM)?
b. Suppose the bond can be called (that is, bought back) by the issuer at par at the end of year 13.Assume that it will be called, what is its new YTM?
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Financial Markets and Institutions
Authors: Jeff Madura
11th Edition
1133947875, 9781305143005, 1305143000, 978-1133947875
