Share
Explore BrainMass

Buying 10-Year Bonds

Trevor Price bought 10-year bonds issued by Harvest Foods five years ago for $1,003.82. The bonds make semiannual coupon payments at a rate of 8.4 percent. If the current price of the bonds is $1,077.02, what is the yield that Trevor would earn by selling the bonds today? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)

Solution Preview

See the attached Excel

YTM of a Bond
Trevor Price bought 10-year bonds issued by Harvest Foods five years ago for $1,003.82. The bonds make semiannual coupon payments at a rate of 8.4 percent. If the current price of the bonds is $1,077.02, what is the yield that Trevor would earn by selling the bonds today? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal ...

Solution Summary

This post shows how to calculate the yield on a bond investment

$2.19