question 59

Yield to maturity The Salem Company bond currently sells for $751.97, has a coupon interest rate of 12% and a $1000 par value, pays interest annualy, and has 20 years to maturity a. Calculate the yield to maturity (YTM) on this bond of a bond a. The yield to maturity on this bond is % (Round to three decimal places) b. Explain the relationship that exists between the coupon interest rate and yield to maturity and the par value and market value of a b. Explain the relationship that exists between the coupon Interest rate and yield to maturity and the par value and market value of a bond. Select the best answer below) O A The market value of the bond approaches its par value as the time to maturity declines. The yield to maturty approaches the coupon Interest rate as the time to maturity declines, OB. The market value of the bond approaches its par value as the same to matunty decines. The yield to matury approaches the coupon interest rate as the time to maturity increases OC. The market value of the bond approaches its per value as the time to maturity increases. The yield to maturity approaches the coupar interest rate as the time to maturity increases OD. The market value of the bond approaches ta par value as the time to maturity increases. The yield to maturty approaches the coupon interest rate as the time to matury decines Click to select your answers MacBook Air