Assume that the Financial Management Corporations $ 1,000- par- value bond had a
ID: 2673149 • Letter: A
Question
Assume that the Financial Management Corporations $ 1,000- par- value bond had a 5.700% coupon, matured on May 15, 2017, had a current price quote of 97.708, and had a yield to maturity (YTM) of 6.034%.Given this information, answer the following questions. a. What was the dollar price of the bond? b. What is the bonds current yield? c. Is the bond selling at par, at a discount, or at a premium? Why? d. Compare the bonds current yield calculated in part b to its YTM and explain why they differ.
Explanation / Answer
For part b current yield I got 5.83%. I believe the author of this answer make a typo.
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