Bond yields
Not what you're looking for?
12% coupon bonds, with 5 yrs left to maturity, bonds make annual payments, if the bond currentyly sells for $1,107.93 what is the YTM?
so i did:
12%=$120 every year for 5 years
1,107.93=$120 x [ 1-1 / (1+r)5] /r +1000/(1+r)5 ( the five is an exponent )
yet i do not know how to find the rate of return to finish up
the same problem with these numbers:
9% coupon
15 yrs left to maturity
annual payments
currently sells for $1,157.9
---------------------------------------------------------------------------
8.4% coupon bonds, 7yrs left to maturity , semi annual payments, currently sells for 89.317% of par what is the current yield? YTM? and the EAR?
i do not understand which formula to use and where to start because it does not give the par only the % of it. and if i multiply it out it is 89.317x100= 8931.7
the same problem with these numbers:
7.2% coupon bonds
17 years to maturity
semi annual payments
currently sell for 106.077 % of par
Purchase this Solution
Solution Summary
The solution explains the calculation of current yield, YTM and EAR of a bond
Solution Preview
In solving for YTM ( which is the same as IRR) you cannot write the equation and solve for r. You have to use trial and error. Start with an r and chnage the r till you get the right figure. The other method is to use the IRR function of excel.
12% coupon bonds, with 5 yrs left to maturity, bonds make annual payments, if the bond currentyly sells for $1,107.93 what is the YTM?
If we do manually, since the price is higher than $1,000 ( which is usually the par value), the YTM would be less than than the coupon rate and you can start with 10%. At 10% the price of the bond comes to ( you can use the ...
Purchase this Solution
Free BrainMass Quizzes
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.