Asked by Ashley Egeland on Jul 02, 2024
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An investor bought an 8 ½% bond at 98. The bond would mature in 4 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 it is held until its maturity date.
8 ½% Bond
A bond that pays an annual interest rate of 8.5% on its face value.
- Assess the yield to maturity of a bond by evaluating its payment for purchase, the periodic coupon rate, and the length of time to its maturity.
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KR
Learning Objectives
- Assess the yield to maturity of a bond by evaluating its payment for purchase, the periodic coupon rate, and the length of time to its maturity.