Question

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.

Answer 1

Answer:

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%