You own a bond with a par value of $1,000 and a coupon rate of 8.50% (semiannual coupon). You know it has a current yield of 7.0
0%. What is its yield to maturity? The bond has 6 years to maturity. Current Yield = (annual payment / price). (hint: solve for price to answer the question). Group of answer choices
1 answer:
Answer:
Answer for the question:
You own a bond with a par value of $1,000 and a coupon rate of 8.50% (semiannual coupon). You know it has a current yield of 7.00%. What is its yield to maturity? The bond has 6 years to maturity. Current Yield = (annual payment / price). (hint: solve for price to answer the question). Group of answer choices
is given in the attachment.
Explanation:
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Answer:
a) 0.667
b) Yes
Explanation:
Data provided in the question:
Mean = 0.04
Standard Deviation = 0.003
Upper Specification Limit, USL = 0.046
Lower Specification Limit, LSL = 0.034
Now,
a) Capability Index is given as:
Cp =
or
Cp =
or
Cp = 0.667
Also,
Cpk = min(
or
Cpk = min(
or
Cpk = min( 0.667 , 0.667 )= 0.667
Since,
Cp and Cpk are same in this case
therefore, it is ideal condition and process is capable
b) yes