Calculate the yield to maturity on the following bonds:
A 9.4 percent coupon (paid semiannually) bond, with a $1,000 face value and 19 years remaining to maturity. The bond is selling at $965.
An 8.4 percent coupon (paid quarterly) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $901.
An 11.4 percent coupon (paid annually) bond, with a $1,000 face value and 6 years remaining to maturity. The bond is selling at $1,051.
please show and explain all steps on a financial calculator as well
| 1) | ||||||||
| Yield to maturity | = | =rate(nper,pmt,-pv,fv)*2 | Where, | |||||
| = | 9.81% | nper | 19*12/6 | = | 38 | |||
| pmt | 1000*9.4%*6/12 | = | $ 47.00 | |||||
| pv | = | $ 965.00 | ||||||
| fv | = | $ 1,000.00 | ||||||
| 2) | ||||||||
| Yield to maturity | = | =rate(nper,pmt,-pv,fv)*4 | Where, | |||||
| = | 9.98% | nper | 10*12/3 | = | 40 | |||
| pmt | 1000*8.4%*3/12 | = | $ 21.00 | |||||
| pv | = | $ 901.00 | ||||||
| fv | = | $ 1,000.00 | ||||||
| 3) | ||||||||
| Yield to maturity | = | =rate(nper,pmt,-pv,fv) | Where, | |||||
| = | 10.84% | nper | 6 | = | 40 | |||
| pmt | 1000*11.4% | = | $ 114.00 | |||||
| pv | = | $ 1,051.00 | ||||||
| fv | = | $ 1,000.00 | ||||||
Get Answers For Free
Most questions answered within 1 hours.