Question

Calculate the yield to maturity on the following bonds. a. A 9.5 percent coupon (paid semiannually) bond, with a $1,000 face value and 20 years remaining to maturity. The bond is selling at $960. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) Yield to maturity % per year b. An 10 percent coupon (paid quarterly) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $902. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) Yield to maturity % per year c. An 9 percent coupon (paid annually) bond, with a $1,000 face value and 6 years remaining to maturity. The bond is selling at $1,052. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) Yield to maturity

Answer 1

a)	Coupon rate=(9.5%/2)	4.8%
	Years to maturity=(20*2)=nper	40	Years
	Future value=FV	$1,000
	Present Value=PV	-960
	Coupon Payment=PMT	$48
	Number of payments	2
	RATE(nper,Pmt,PV,FV,Type)
	RATE(40,48,-960,1000,0)	5.034%
	Yield to Maturity=	10.068%
b)	Coupon rate=(10%/4)	2.5%
	Years to maturity=(10*4)=nper	40	Years
	Future value=FV	$1,000
	Present Value=PV	-902
	Coupon Payment=PMT	$25
	Number of payments	4
	RATE(nper,Pmt,PV,FV,Type)
	RATE(40,25,-902,1000,0)
	Yield to maturity	2.918%
	yield to maturity=(2.918%*4)	11.674%
c )	Coupon rate=	9.0%
	Years to maturity=nper	6	Years
	Future value=FV	$1,000
	Present Value=PV	-1052
	Coupon Payment=PMT	$90
	Number of payments	1
	RATE(nper,Pmt,PV,FV,Type)
	RATE(90,6,-1052,1000,0)
	Yield to maturity	0.527%