Question

Calculate the yield to maturity on the following bonds. a. A 8.6 percent coupon (paid semiannually)...

Calculate the yield to maturity on the following bonds.


a.

A 8.6 percent coupon (paid semiannually) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $915. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161))


  Yield to maturity % per year  


b.

An 5.7 percent coupon (paid quarterly) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $911. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161))


  Yield to maturity % per year  


c.

An 7.7 percent coupon (paid annually) bond, with a $1,000 face value and 8 years remaining to maturity. The bond is selling at $1,061. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161))


  Yield to maturity % per year  

PLEASE SHOW THE WORK

Homework Answers

Answer #1

Using financial calculator BA II Plus - Input details:

a

b

c

FV = Face value =

-$1,000.00

-$1,000.00

-$1,000.00

PV = Bond price =

$915.00

$911.00

$1,061.00

PMT = Coupon/frequency =

-$43.00

-$14.25

-$77.00

N = Years to mature x frequency =

20.00

40.00

8.00

CPT > I/Y = Rate =

                          4.9810

                          1.7354

                          6.6907

Yield to Maturity = Rate * Frequency /100 =

9.962%

6.942%

6.691%

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