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The face value of each bond is $100. Assume interest compounds annually. Bonds issued in May 2000. Coupon Rate, Maturity Date, Market Price (Pb), Yield

The face value of each bond is $100. Assume interest compounds annually. Bonds issued in May 2000.

Coupon Rate, Maturity Date, Market Price (Pb), Yield to Maturity, Current Yield

10.75% May 2003 110.34

6.75% May 2005 100.16

6.25% May 2030 101.81

a. Solve for yield to maturity and current yield for each bond above.

b. For which bond(s) is the current yield a good approximation of the yield to maturity?

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