Asked by Peter Isais on May 25, 2024
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An investor bought an 8% bond at 110. The bond would mature in 8 years. Compute the rate of yield to maturity. (Do not consider commission. Round answer to two decimal places.)
Yield To Maturity
The total return anticipated on a bond if the bond is held until it matures, including all interest payments and the repayment of principal.
8% Bond
A bond that pays an annual interest rate of 8% of its face value to the bondholders.
- Ascertain the maturity yield of a bond by factoring in the buying price, fixed interest payment, and time left to maturity.
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Learning Objectives
- Ascertain the maturity yield of a bond by factoring in the buying price, fixed interest payment, and time left to maturity.