Gr ORION ent BACKNEXT Problem 8.20 Electrolex, Inc, has four-year bonds outstand

Question

Gr ORION ent BACKNEXT Problem 8.20 Electrolex, Inc, has four-year bonds outstanding that pay a coupon rate of 6.3 percent and make coupon payments these bonds are currently selling at $911.89. is the yield to maturity that an investor can expect to earn on these bonds? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%o.) ld to maturity What is the effective annual yield? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 e annual yield By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. SUBHIT ANSWER Earn Maximum Points available only if you answer this question correctly in two attempts or less

Explanation / Answer

use financial calculator

FV=1000

PV=-911.89

N=4*2=8 semi annual

PMT=1000*6.3%/2=31.50

Click CPT

Click 1/Y=4.485% PER SEMI ANNUAL

YTM =4.485%*2=8.97% is answer

effective annual yield=(1+4.485%)^2-1

=9.17%

the above are answer

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