References

FIN$300$ FINANCIAL MANAGEMENT $-$ ONLINE $-$ Microsoft Word

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$(/$ marks$)$

b$)$ Assume that there is a bond on the market priced at $$850$ and that the bond comes with a face value of $$1,000($a fairly common face value for bonds$).$

On this bond, yearly coupons are $$150.$ The coupon rate for the bond is $15\%$ and the bond will reach maturity in $7$ years.

Calculate the Yield to Maturity $($YTM$).$

$(6$ marks$)$