Question

QUESTION 27

1. What is the time to maturity (in years) on a bond? The bond currently sells for $1,189.08, pays semiannual coupon payments with a coupon rate of 10%, has a yield to maturity of 8%, has a par value of $1,000.

   		9
   		36
   		18
   		20
   		40

Answer 1

18

Working:

Number of period		=	=nper(rate,pmt,pv,fv)
(Semi annual)		=	36
Number of period in years			=	36/2	=	18
Where,
rate	Semi annual yield to maturity			8%/2	=	4%
pmt	Semi annual coupon payment			1000*5%	=	$         50.00
pv	Current Value				=	$ -1,189.08
fv	Face value				=	$   1,000.00