A $1,000 par value bond sells for $1,216. It matures in 20 years, has a 14 percent coupon, pays interest semiannually, and can be called in 5 years at a price of $1,100. What is the bond's YTM and YTC?
a. 6.05%; 9.00%
b. 10.00%; 10.26%
c. 10.06%; 12.00%
d. 11.26%; 14.00%
e. 11.26%; 10.00%
We can calculate the YTM and the YTC using the RATE function in excel. In YTC we ...
The solution explains how to calculate the bond's YTC and YTM