Question

??(Yield to? maturity)?The market price is $ 700 for a 10 year bond ($1,000 par value) that pays 9 percent annual interest, but makes interest payments on a semiannual basis

?(4.5 percent semiannually). What is the? bond's yield to? maturity?

The? bond's yield to maturity is___% (Round to two decimal places.)

Answer 1

Using financial calculator BA II Plus - Input details:	#
FV = Future Value =	$1,000
PV = Present Value =	-$700.00
N = Total number of remaining payment periods = 10 x 2 =	20
PMT = Payment =	$45
CPT > I/Y = Rate Semiannual =	7.4263
Convert Yield in annual and percentage form = Yield x 100 x 2	14.85%

The? bond's yield to maturity is 14.85% (Round to two decimal places.)