The GM bond trades at 95.57 (percent of par). What is the yield to maturity (YTM)? Incorrect The general bond pricing equation is: P=rC[1(1+r)N1]+(1+r)NF Remember that prices are quoted as a percentage of par value. For this particular GM bond: 955.69=r30.5[1(1+r)81]+(1+r)81,000 We can use trial and error, a financial calculator or Excel (using the RATE() or YIELD() functions) to find r : Using a financial calculator: Using Excel (don't enter the thousands separators): =RATE(nper, pmt, pv, fv) =RATE(8,30.5,955.69,1,000) =0.037 Since YTM is always quoted as an APR with semiannual compounding, we need to double the period rate: YTM=20.037=0.074 Part 2 Attempt 5/5 for 10 What should be the price of the Ford bond (in $ )? InEro A GM and a Ford bond both have 4 years to maturity, a $1,000 par value, a BB rating and pay interest semiannually. GM has a coupon rate of 6.1%, while Ford has a coupon rate of 5.2%