Question
Question 2: A $1,000 (face value) bond with 10 years to maturity and 7% annual coupon is selling for $1,154.43.[Note: The YTM is an integer.]
Question 2:
A $1,000 (face value) bond with 10 years to maturity and 7% annual coupon is selling for $1,154.43.[Note: The YTM is an integer.]
a) Is the bond selling at premium, par or discount? Briefly explain your answer. (NO calculation required).
b) If you are asked to calculate the YTM without using a financial calculator (i.e., using the trial and error method manually), what interest rate would you start with. Explain your answer.
c) what is the yield maturity (YTM)?
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Essentials of Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
10th edition
77835425, 978-0077835422
