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31 August, 21:13

What is the YTM of a bond if it is sold for $1,029.33, pays a semi-annual coupon of $40, and matures in 15 years? Round to the nearest hundredth percent. Do not include a percent sign in your answer.

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  1. 31 August, 22:44
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    The YTM of a bond is 7.67%

    Explanation:

    From a financial calculator, plug the following figures:

    PV = - 1029.33

    PMT = 40

    N = 15*2

    =30

    FV = 1000

    CPT I/Y = 3.834%

    Then:

    YTM = 3.834*2

    = 7.67%

    Therefore, The YTM of a bond is 7.67%
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