Explore BrainMass

Explore BrainMass

    Current Yield vs Yield to Maturity

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Explain the difference of a bond's Current Yield and its Yield to Maturity. Why would these measures be important to a bond investor? Find the Current Yield and the Yield to Maturity of a 20 year, nine percent coupon, $1000 par value bond currently trading in the market at $850.

    © BrainMass Inc. brainmass.com June 4, 2020, 1:34 am ad1c9bdddf
    https://brainmass.com/business/bond-valuation/current-yield-yield-maturity-408445

    Solution Summary

    This solution explains the difference of a bond's Current Yield and its Yield to Maturity. It also explains why these measures would be important to a bond investor. Finally, it illustrates how to find the Current Yield and the Yield to Maturity of a 20 year, nine percent coupon, $1000 par value bond currently trading in the market at $850.

    $2.19

    ADVERTISEMENT