Fitzgerald's 25-year bonds pay 11 percent interest annually on a $1,000 par value. If the bonds sell at $895:
What is the bond's yield to maturity?
What would be the yield to maturity if the bonds paid interest semi-annually?
Explain the difference.
Yield to maturity is same in both the cases but the difference is that annual interest paying bond means that bond pays interest once in a year and in case of semi annual interest paying bond ,it pays interest twice in a year i.e, every six months
Get Answers For Free
Most questions answered within 1 hours.