A 15-year maturity bond with face value of $1,000 makes semiannual coupon paymen

Question

A 15-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 12%.

What is the bond’s yield to maturity if the bond is selling for $980? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

What is the bond’s yield to maturity if the bond is selling for $1,180? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

a.

What is the bond’s yield to maturity if the bond is selling for $980? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Explanation / Answer

a)

b)

c)

Face value (FV) $                                        1,000 Coupon rate 12.00% Number of compounding periods per year                                                    2 Interest per period (PMT) $                                        60.00 Bond price (PV) $                                   (980.00) Number of years to maturity 15 Number of compounding periods till maturity (NPER)                                                  30 Bond Yield to maturity RATE(NPER,PMT,PV,FV)*2 Bond Yield to maturity 12.30%

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