Asked by Lauren Hammons on Apr 24, 2024
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An investor bought a 6 ½% bond at 85. The bond would mature in 5 years. Compute the rate of yield to maturity. (Do not consider commission. Round answer to two decimal places.)
Yield To Maturity
The expected total yield on a bond when it's held all the way to its date of maturity.
6 ½% Bond
A type of bond that pays an annual interest rate of six and a half percent to its holders, representing part of the bond's fixed-income return.
- Work out the yield to maturity (YTM) of a bond by considering its initial cost, its annual coupon rate, and the timeframe until its maturity.
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AB
Learning Objectives
- Work out the yield to maturity (YTM) of a bond by considering its initial cost, its annual coupon rate, and the timeframe until its maturity.