A firm issued bonds that will pay $1000 with certainty in one year. The market price was $970. If youpurchased one of those bonds, what is the yield in percent, on the bond held to maturity?Round to one decimal place and do not enter the % sign. If your answer is 1.333%, enter 1.3. If your answer is1.666%, enter 1.7. If appropriate, remember to enter the sign.

Market Price of bond = $970 Future Value of bond after one year = $1,000 Formula:Current Value of…

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what is the yield in percent, on the bond held to maturity?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 5P

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Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

Question

A firm issued bonds that will pay $1000 with certainty in one year. The market price was $970. If you
purchased one of those bonds, what is the yield in percent, on the bond held to maturity?
Round to one decimal place and do not enter the % sign. If your answer is 1.333%, enter 1.3. If your answer is
1.666%, enter 1.7. If appropriate, remember to enter the sign.

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