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Yield to maturity and future price A bond has a $1,000 par value, 12 years to...

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Finance

Yield to maturity and future price

A bond has a $1,000 par value, 12 years to maturity, and a 8%annual coupon and sells for $980.

  1. What is its yield to maturity (YTM)? Round your answer to twodecimal places.

       %
  2. Assume that the yield to maturity remains constant for the next5 years. What will the price be 5 years from today? Round youranswer to the nearest cent.

    $   

Answer & Explanation Solved by verified expert
4.4 Ratings (769 Votes)
aInformation provided Par value future value 1000 Present value 980 Time 12 years Coupon rate 8 Coupon payment 0081000 80 The yield to maturity is calculated by entering the below    See Answer
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Transcribed Image Text

Yield to maturity and future priceA bond has a $1,000 par value, 12 years to maturity, and a 8%annual coupon and sells for $980.What is its yield to maturity (YTM)? Round your answer to twodecimal places.   %Assume that the yield to maturity remains constant for the next5 years. What will the price be 5 years from today? Round youranswer to the nearest cent.$   

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