Question
Suppose there are two bonds for sale; Bond ART with 7-years to maturity, paying a semi-annual interest payment of $57.75, and available for purchase at
- Suppose there are two bonds for sale; Bond ART with 7-years to maturity, paying a semi-annual interest payment of $57.75, and available for purchase at $1,017.63; and then a second bond, Bond BMW, for sale at $989.54, maturing in 8-years, and paying $63.65 on a semi-annual basis. What is the YTM of the two bonds? And which one will you add to your portfolio based on the highest yield to maturity?
- YTM of ART = .1118 or 11.18%
- YTM of BMW = .1294 or 12.94%
- Select BMW
PLEASE show work. This is on my finance study guide and we are not allowed to use excel, I have to know how to do it by hand. Right above are the answers, just need to know how to get them
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Fundamentals of Advanced Accounting
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
5th edition
978-0077924379, 77924371, 978-0078025396, 78025397, 978-0077425654, 77425650, 978-0077667061
