Which bond will have a higher yield to maturity, a $1,000 face value bond, with a 5.0% coupon rate that sells for $900; or a $1000 face value bond, with a $50 annual coupon that sells for $1,050. Explain your choice.
For the first bond
FV = 1000
annual payment = 5% * 1000 = 50
PV = -900
assuming they are both three-year bond
N = 3
by a financial ...
Yield to Maturity is chosen.