10 Problem 15-14 Calculating Yields [LO15-5] 10 points Assume that 10 years ago

Question

10 Problem 15-14 Calculating Yields [LO15-5] 10 points Assume that 10 years ago you purchased a $1,000 bond for $895. The bond pays 7.50 percent interest and will mature this year. (a) Calculate the current yield on your bond investment at the time of the purchase. Enter your answer as a percent rounded to 2 decimal places.) Ask Current yield Print References(b) Determine the yield to maturity on your bond investment at the time of purchase. Enter your answer as a percent rounded to 2 decimal places.) Yield to maturity

Explanation / Answer

a

b

Current Yield =Coupon Payment/Bond Price=75/895 =8.38%

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