Asked by Anggy Alvarado on May 19, 2024
Verified
An investor bought two bonds. bond A was an 8% bond at 102 and bond B was an 8 ½% bond at 104. Each bond is to mature in 4 years. Compute how much greater the yield to maturity from bond A is than from bond B. (Do not consider commission. Round yields to two decimal places.)
Yield To Maturity
The total return anticipated on a bond if the bond is held until its maturity date.
Bond B
A reference to a specific bond investment, often denoted for classification or tracking purposes.
- Compute the bond's yield to maturity based on its purchase value, annual interest rate, and the term until it matures.
Verified Answer
VT
Learning Objectives
- Compute the bond's yield to maturity based on its purchase value, annual interest rate, and the term until it matures.