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. What is the Yield to Maturity (YTM) of a bond which can be bought today for $10,131.25? The bond has a face value of

. What is the Yield to Maturity (YTM) of a bond which can be bought today for $10,131.25? The bond has a face value of $10,000. It pays 9.50% coupons semi-annually and it will mature in exactly 7 years. (2 marks)

HINT: First, compute the YTM by multiplying the periodic rate by the coupon frequency. Second, convert this rate to an effective annual rate.

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