Answer:
Their yield to maturity (YTM) is 6.11%
Explanation:
Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.
Face value = F = $1,000
Coupon payment = $65
Selling price = P = $1,040
Number of periods = n = 15 years
Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]
Yield to maturity = [ $65 + ( $1,000 - $1,040 ) / 15 ] / [ ( 1,000 + $$1,040 ) / 2 ]
Yield to maturity = [ $65 - 2.67 ] / $1,020 = $62.33 / $1,020 = 0.0611 = 6.11%