You are interested in investing in bonds issued by the ABC Corporation.

The bonds are offering a coupon yield of 6.75% per year.

Interest is paid out on a semi-annual basis.

The par value of the bond is $1,000.00

The bond has a 10 year life.

The bond has a current value of $987.50

What is the annual yield to maturity (YTM) of the bond?

Use Goal Seek to find the YTM. Remember the semiannual compound period.

6.93%

7.93%

5.93%

9.63%

Question 15

4 Points

A bond has a par value of $1,000 and a maturity of 20 years.

It carries a coupon interest rate of 6.00% with interest compounded annually.

The current value of the bond is a $1195.12 premium.

What is the annual yield to maturity (YTM)?

Use Goal Seek.

4.50%

7.45%

6.40%

5.50%

Question 16

4 Points

A bond has a par value of $1,000.

It carries a coupon interest rate of 5.00% with interest compounded annually.

The yield to matruity is 8.0%

The current value of the bond is a $768.30 discount.

What is the maturity on the bond?

Use Goal Seek.

5.12 years

13.55 years

12.50 years

11.50 years