Yield, Price, and YTM

A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $960 and it now selling for $1,000.

1. What is its current yield? Round your answer to one decimal place.

   %

2. What will be its selling price in two years if comparable market interest rates drop 3.9 percentage points? Round Present Value of a Single Amount and Present Value of Series of Equal Amounts in intermediate calculations to four decimal places. Round your answer to the nearest cent.

   $

3. Calculate the bond's YTM using Equation 14.5 or the Garman/Forgue companion website. Round your answer to two decimal places.

   %

*other people had the same question on here and all of them were wrong. So please check their questions first to see if you get the same wrong answer as the others. Thank you

eBook Do the Math 14-6 Yield, Price, and YTM A corporate bond maturing in 15 years with a coupon rate of 9.9 percent was purchased for $960 and it now selling for $1,000. a. What is its current yield? Round your answer to one decimal place. 9.9 % b. What will be its selling price in two years if comparable market interest rates drop 3.9 percentage points? (Hint: Use Appendix A-2 and Appendix A-4 or the Garman/Forgue companion website.) Round Present Value of a Single Amount and Present Value of Series of Equal Amounts in intermediate calculations to four decimal places. Round your answer to the nearest cent. 1000 X C. Calculate the bond's YTM using Equation 14.5 or the Garman/Forgue companion website. Round your answer to two decimal places. 10.01 % Appendix A-2 Present Value of a Single Amount ($1) (Used to Compute the Discounted Present Value of Some Known Future Single Lump Sum) 2% 3% 4% 6% 7% 9% 10% 11% 12% 13% 14% 15% 16% 19% 20% n 1% 1 0.9901 2 0.9803 0.9709 0.9615 5% 0.9524 0.9070 0.9434 0.9346 8% 0.9259 0.8573 0.9174 0.9091 0.9009 0.8850 0.8772 0.8621 0.9804 0.9612 0.8403 0.8333 0.9426 0.9246 17% 18% 0.8547 0.8475 0.7305 0.7182 0.6244 0.6086 0.8900 0.8734 0.8417 0.8264 0.8929 0.7972 0.7118 0.8116 0.7831 0.7695 0.7432 0.7062 0.6944 3 0.9423 0.9151 0.8890 0.8638 0.8396 0.8163 0.7722 0.7513 0.7312 0.6931 0.6750 0.8696 0.7561 0.6575 0.5718 0.4972 0.6407 0.5934 0.5787 0.9706 0.9610 0.9515 0.7938 0.7350 4 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7084 0.6830 0.6587 0.6355 0.6133 0.5921 0.5523 0.5337 0.5158 0.4987 0.4823 5 0.9057 0.8626 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5935 0.5674 0.5194 0.4561 0.4371 0.4190 0.4019 0.8219 0.7903 0.5428 0.4803 0.4761 0.4104 6 0.9420 08880 0.8375 0.7462 0.7050 0.6663 0.5645 0.5346 0.5066 0.4556 0.3898 0.3704 0.3349 0.6302 0.5835 0.5963 0.5470 0.4323 0.3759 0.3521 0.2959 7 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5132 0.4817 0.4523 0.4251 0.3996 0.3538 0.3332 0.3139 0.2791 8 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4339 0.4039 0.3762 0.3506 0.3269 0.3050 0.2848 0.2660 0.2487 0.2326 9 0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 03909 0.3329 0.3075 0.2843 0.2630 0.2434 0.2255 0.2090 0.1938 0.3606 0.3220 10 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3522 0.2946 0.2697 0.2472 0.2267 0.2080 0.1911 0.1756 0.1615 11 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 03173 0.2875 0.2607 0.2366 0.2149 0.1954 0.1619 0.1476 0.1346 12 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.2858 0.2567 0.2307 0.2076 0.1869 0.1685 0.1778 0.1520 0.1299 0.1372 0.1240 0.3186 0.2897 0.1122 13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2575 0.2292 0.2042 0.1821 0.1625 0.1452 0.1163 0.1042 0.0935 14 0.8700 0.7579 0.6611 0.5775 0.5051 0.3405 0.2633 0.2320 0.2046 0.1807 0.1597 0.1413 0.1252 0.1110 0.0985 0.0876 0.0779 0.4423 0.4173 0.3878 0.3624 0.2992 0.2745 15 0.8613 0.7430 0.6419 0.5553 0.48 10 0.3152 0.2394 0.2090 0.1827 0.1599 0.1401 0.1229 0.1079 0.0949 0.0835 0.0736 0.0649 16 0.7284 0.6232 0.5339 0.4581 0.3936 03387 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.1229 0.1069 0.0930 0.0811 0.0708 0.0618 0.0541 0.8528 0.8444 17 0.7142 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1696 0.1456 0.1252 0.09 29 0.0802 0.0693 0.0451 0.1078 0.0946 0.0600 0.0508 0.0520 0.0437 18 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1528 0.1300 0.0808 0.0691 0.0592 0.0376 19 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.1108 0.0981 0.0868 0.0829 0.1377 0.1240 0.0313 0.0703 0.0611 0.0596 0.0514 0.0506 0.0433 0.0367 0.0308 20 08195 0.6730 0.5537 0.4564 0.3769 03118 0.2584 0.2145 0.1784 0.1486 0.0728 0.0261 21 08114 0.6598 0.5375 0.4388 0.3589 0.2942 0.2415 0.1637 0.0768 0.0638 0.1037 0.0926 0.0826 0.0443 0.0370 0.1987 0.1839 0.1351 0.1228 0.0217 0.0431 0.0365 0.0309 0.0262 0.0222 0.0259 0.0218 22 0.8034 0.6468 0.5219 0.4220 0.3418 0.1117 0.1007 0.0907 0.2775 0.2257 0.0560 0.0382 0.03 16 0.0181 0.0531 0.0462 0.0402 0.0349 23 0.7954 0.6342 0.5067 0.4057 0.3256 0.2618 0.1502 0.1378 0.1264 0.2109 0.1117 0.0738 0.0680 0.0601 0.0532 0.0491 0.0329 0.0270 0.1703 0.1577 0.0183 0.0151 24 0.7876 0.6217 0.4919 0.3901 0.3101 0.2470 0.1971 0.1015 0.0817 0.0659 0.0431 0.0284 0.0231 0.0188 0.0154 0.0126 25 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.0923 0.0736 0.0471 0.0378 0.0304 0.0197 0.0160 0.0105 0.1460 0.1352 0.0588 0.0525 0.0245 0.0211 26 0.7720 0.5976 0.4637 0.3607 0.2812 0.2198 0.1722 0.0839 0.0663 0.0417 0.0331 0.0169 0.0135 0.0087 0.0264 0.0230 0.0129 0.0109 0.0091 0.0077 27 0.7644 0.5859 0.4502 0.3468 0.2678 0.2074 0.1160 0.1064 0.0976 0.0895 0.0822 0.0469 0.0369 0.0291 0.0182 0.0144 0.0115 0.1609 0.1504 0.0073 0.0597 0.0538 28 0.7568 0.5744 0.4371 0.3335 0.2551 0.0326 0.0255 0.0157 0.0061 0.1252 0.1159 0.1073 0.0994 0.1956 0.1846 0.0763 0.0693 0.0630 0.0573 0.0419 0.0374 0.0123 0.0105 0.0097 0.0082 29 0.7493 0.5631 0.3207 0.1406 0.0289 0.0224 0.0200 0.0174 0.0151 0.0135 0.0064 0.4243 04120 0.0051 0.2429 0.2314 0.0485 0.0437 30 0.7419 0.5521 0.3083 0.1741 0.1314 0.0754 0.0334 0.0256 0.0196 0.0116 0.0090 0.0070 0.0054 0.0042 40 0.6717 0.4529 0.3066 0.2083 0.1420 0.0972 0.0668 0.0460 0.0318 0.0221 0.0154 0.0107 0.0075 0.0053 0.0037 0.0026 0.0019 0.0013 0.0010 0.0007 50 0.6080 0.3715 0.2281 0.1407 0.0872 0.0543 0.0339 0.0213 0.0134 0.0085 0.0054 0.0035 0.0022 0.0014 0.0009 0.0006 0.0004 0.0003 0.0002 0.0001 Appendix A-4 Present Value of a Series of Equal Amounts (an Annuity of $1 Received at the End of Each Period) (Used to compute the Discounted Present Value of a Stream of Income Payments) n 1% 2% 5% 17% 3% 0.9709 4% 0.9615 6% 0.9434 7% 0.9346 8% 0.9259 1 0.9901 0.9804 0.9524 9% 10% 11% 12% 0.9174 0.9091 0.9009 0.8929 1.7591 1.7355 1.7125 1.6901 13% 14% 15% 16% 0.8850 0.8772 0.8696 0.8621 1.6681 1.6467 1.6257 1.6052 0.8547 2 1.9704 1.9416 1.9135 1.8861 1.8594 1.8334 1.8080 1.7833 1.5852 18% 19% 20% 0.8475 0.8403 0.8333 1.5656 1.5465 1.5278 2.1743 2.1399 2.1065 2.6901 2.6386 2.5887 3 2.9410 2.8839 2.7751 2.7232 2.6730 2.6243 2.5771 2.5313 2.4869 2.4437 2.4018 2.3612 2.3216 2.2832 2.2459 2.2096 2.8286 3.7171 4 3.9020 3.8077 3.6299 3.4651 3.3872 3.3121 3.2397 3.1699 3.0373 2.9745 2.9137 2.8550 2.7432 3.5460 4.3295 3.1024 3.6959 2.7982 3.2743 5 4.8534 4.7135 4.5797 4.4518 4.2124 4.1002 3.9927 3.8897 3.7908 3.6048 3.5172 3.4331 3.3522 3.1993 3.1272 3.0576 2.9906 6 5.7955 5.6014 5.4172 5.2421 5.0757 4.9173 4.7665 4.6229 4.4859 4.3553 4.2305 4.1114 3.9975 3.8887 3.7845 3.6847 3.5892 3.4976 3.4098 3.3255 7 6.7282 6.4720 6.0021 5.7864 5.5824 53893 5.2064 5.0330 4.8684 4.7122 4.5638 4.4226 4.2883 4.1604 4.0386 3.9224 3.7057 3.6046 6.2303 7.0197 3.8115 4.0776 8 7.6517 7.3255 6.7327 6.4632 6.2098 5.9713 5.7466 5.5348 5.3349 5.1461 4.9676 4.7988 4.6389 4.4873 4.3436 4.2072 3.9544 3.8372 4.0310 9 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 5.5370 5.3282 5.1317 4.9464 4.7716 4.6065 4.4506 4.3030 4.1633 4.3389 10 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 5.8892 5.6502 5.4262 5.2161 5.0188 4.8332 4.6586 4.4941 4.1925 11 10.3676 9.7868 9.2526 8.7605 8.3064 7.8869 7.4987 7.1390 6.8052 6.4951 6.2065 5.9377 5.6869 5.4527 5.2337 5.0286 4.8364 4.6560 4.4865 4.3271 12 11.2551 10.5753 9.9540 9.3851 8.8633 8.3838 7.9427 7.5361 7.1607 6.8137 6.4924 6.1944 5.9176 5.6603 5.4206 5.1971 4.9884 4.7932 4.6105 4.4392 13 12.1337 11.3484 10.6350 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.7499 6.4235 6.12 18 5.8424 5.5831 5.3423 5.1183 4.9095 4.7147 4.5327 14 13.0037 12.1062 11.2961 10.5631 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.98 19 6.6282 6.3025 6.0021 5.7245 5.4675 5.2293 5.0081 4.8023 4.6106 15 13.8651 12.8493 11.9379 11.1184 10.3797 9.7122 9.1079 8.5595 8.0607 7.6061 7.1909 6.8109 6.4624 6.1422 5.8474 5.5755 5.3242 5.0916 4.8759 4.6755 16 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 7.3792 6.6039 6.2651 5.9542 5.6685 5.4053 5.1624 4.9377 4.7296 6.9740 7.1196 17 15.5623 14.2919 13.1661 12.1657 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 7.5488 6.7291 6.3729 6.0472 5.7487 5.4746 5.2223 4.9897 4.7746 18 14.9920 13.7535 12.6593 11.6896 10.8276 9.3719 8.7556 8.2014 7.7016 7.2497 6.8399 6.4674 6.1280 5.8178 5.5339 5.2732 5.0333 4.8122 16.3983 17.2260 10.0591 10.3356 19 15.6785 14.3238 13.1339 12.0853 11.1581 9.6036 8.9501 8.3649 7.8393 7.3658 6.9380 6.5504 6.1982 5.8775 5.5845 5.3162 4.8435 5.0700 5.1009 20 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 79633 7.4694 7.0248 6.6231 6.2593 5.6278 5.3527 4.8696 18.0456 18.8570 8.5136 8.6487 5.9288 5.9731 21 17.0112 15.4150 14.0292 12.8212 11.7641 10.8355 10.0168 9.2922 7.5620 7.1016 6.6870 6.3125 5.6648 5.3837 5.1268 8.0751 8.1757 4.8913 4.9094 22 19.6604 17.6580 15.9369 14.4511 13.1630 12.0416 11.0612 9.4424 8.7715 7.6446 7.1695 6.7429 6.3587 6.0113 5.6964 5.4099 5.1486 10.2007 10.3711 23 20.4558 18.2922 16.4436 14.8568 13.4886 12.3034 11.2722 9.5802 8.8832 8.2664 7.7184 7.2297 6.7921 6.3988 6.0442 5.7234 5.4321 5.1668 49245 24 21.2434 18.9139 16.9355 15.2470 13.7986 12.5504 11.4693 9.7066 8.9847 8.3481 7.7843 7.2829 6.8351 6.4338 5.7465 5.4509 5.1822 4.9371 10.5288 10.6748 6.0726 6.0971 25 22.0232 19.5235 17.4131 15.6221 14.0939 12.7834 11.6536 9.8226 9.0770 8.4217 7.8431 7.3300 6.8729 6.4641 5.7662 5.4669 5.1951 4.9476 26 22.7952 20.1210 17.8768 15.9828 14.3752 13.0032 11.8258 10.8100 9.9290 9.1609 8.4881 7.8957 7.3717 6.9061 6.1182 5.7831 5.4804 5.2060 4.9563 6.4906 6.5135 27 23.5596 20.7069 18.3270 16.3296 11.9867 10.9352 10.0266 9.2372 8.5478 7.9426 7.4086 6.9352 6.1364 5.7975 4.9636 14.6430 14.8981 13.2105 13.4062 5.4919 5.5016 5.2151 5.2228 28 24.3164 21.2813 18.7641 16.6631 12.1371 11.0511 10.1161 9.3066 8.6016 7.9844 7.4412 6.9607 6.5335 5.8099 4.9697 6.1520 6.1656 29 25.0658 21.8444 19.1885 16.9837 15.1411 12.2777 11.1584 10.1983 9.3696 8.6501 8.0218 6.9830 6.5509 5.8204 5.5098 4.9747 13.5907 13.7648 74701 7.4957 5.2292 5.2347 30 25.8077 22.3965 19.6004 17.2920 15.3725 12.4090 11.2578 10.2737 8.6938 8.0552 7.0027 6.5660 6.1772 5.8294 5.5168 4.9789 9.4269 9.7791 40 32.8347 27.3555 23. 1148 19.7928 17.1591 15.0463 13.3317 11.9246 10.7574 89511 8.2438 7.6344 7.1050 6.6418 6.2335 5.8713 5.5482 5.2582 4.9966 50 39.1961 31.4236 25.7298 21.4822 18.2559 15.7619 13.8007 12.2335 10.9617 9.9148 9.0417 8.3045 7.6752 7.1327 6.6605 6.2463 5.8801 5.5541 5.2623 4.9995