Question
The YTM on a bond is the interest rate you earn on your investment if interest rates dont change. If you actually sell the bond
- The YTM on a bond is the interest rate you earn on your investment if interest rates dont change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY).
Suppose that today you bought a bond with an annual coupon of 7% for $1,050. The bond has 17 years to maturity and a face value of $1,000.
After 2 years, the YTM on your bond has declined by 1% and you decide to sell. Whats the price will your bond sell for?
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Investments
Authors: Zvi Bodie, Alex Kane, Alan Marcus, Lorne Switzer, Maureen Stapleton, Dana Boyko, Christine Panasian
9th Canadian Edition
1259271935, 9781259271939
