FIN 3100 – What is the market yield-to-maturity (YTM) of a 7%

FIN 3100 – What is the market yield-to-maturity (YTM) of a 7% Coupon Bond

Subject: Business    / Finance
Question

1. What is the market yield-to-maturity (YTM) of a 7% Coupon Bond that pays $1,000 face at maturity in
6 years from now? The current market price of this bond is $880. (use annual discounting or approximate YTM formula)

2.

What is the market price of a 5% Coupon Bond that pays $1,000 face at maturity in 10 years from now?
Current market interest rate (YTM) for such a bond is 8.0% (use semi-annual discounting)

3.

What is the market yield-to-maturity (YTM) of a Zero Coupon Bond that pays $1,000 face at maturity in
10 years from now? The current market price of this bond is $614. (use annual discounting or approximate YTM formula)