Question

Bond Features Maturity (years) = 3 Face Value = $1,000 YTM = 3.00% Coupon Rate =...

Bond Features
Maturity (years) = 3
Face Value = $1,000
YTM = 3.00%
Coupon Rate = 5.00%
Coupon dates (Annual)

What is the current yield on the above bond between today and year 1?

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Answer #1

Bond Features

Maturity (years) =

3

Face Value =

$1,000

YTM =

3.00%

Coupon Rate =

5.00%

Coupon dates (Annual)

Current Yield

interest/current market price

(1000*5%)/1000

5%

current Yield after year 1

interest/current market price

50/1056.57

4.73%

price after a Year

Using present value function in MS excel

pv(rate,nper,pmt,fv,type)

PV(3%,3,50,1000,0)

($1,056.57)
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