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A bond has a maturity of 10 years, face value of $1,000, and coupon rate of 5.00%. coupon payments are made semiannually. if the bond is currently selling for $1,137.90, compute its annual yield to maturity, with semiannual compounding.

Respuesta :

The yield to maturity of the bond is 4%.

What is the yield to maturity?

The yield to maturity is the discount rate the equates the cost of the bond to the cash flows of the bond.

The yield to maturity can be determined using a financial calculator:

  • Cash flow in year 0 =  $1,137.90
  • Cash flow from period 1 to 20 = 50
  • Cash flow in year 20 = 1000
  • YTM = 4%

To learn more about bond yield, please check: https://brainly.com/question/27287677

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