Question

# A 30-year maturity bond with face value of \$1,000 makes semiannual coupon payments and has a...

 A 30-year maturity bond with face value of \$1,000 makes semiannual coupon payments and has a coupon rate of 9.2%. (Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places.)
 a. What is the yield to maturity if the bond is selling for \$960?
 Yield to maturity %
 b. What is the yield to maturity if the bond is selling for \$1,000?
 Yield to maturity %
 c. What is the yield to maturity if the bond is selling for \$1,080?
 Yield to maturity %

Bond Par Value = \$1,000

Time to maturity = 30 years

Coupon Rate = 9.2% semi-annually

a.

Bond Price = \$960

Calculating YTM of Bond,

Using TVM Calculation,

I = [FV = 1000, PV = 960, T = 60, PMT = 46]

YTM = 9.52%

b.

Bond Price = \$1000

Calculating YTM of Bond,

Using TVM Calculation,

I = [FV = 1000, PV = 1000, T = 60, PMT = 46]

YTM = 9.2%

c.

Bond Price = \$1080

Calculating YTM of Bond,

Using TVM Calculation,

I = [FV = 1000, PV = 1080, T = 60, PMT = 46]

YTM = 8.59%

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