FOUNDATIONS OF FINANCE- MYFINANCELAB
FOUNDATIONS OF FINANCE- MYFINANCELAB
10th Edition
ISBN: 9780135160572
Author: KEOWN
Publisher: PEARSON
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Chapter 7, Problem 22SP
Summary Introduction

To determine: The expected rate of return.

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(Yield to maturity) Assume the market price of a 5-year bond for Margaret Inc. is $1,025, and it has a par value of $1,000. The bond has an annual interest rate of 8% that is paid semiannually. What is the yield to maturity of the bond? The yield to maturity of the bond is ☐ %. (Round to two decimal places.)
A one-year premium bond with a face value of $10,000 has been purchased for $11,150. What is the yield to maturity? What is the yield on a discount basis?
What is the yield to maturity on a bond that has a price of $1,600 and pays $100 interest annually for 6 years at the end of which it repays the principal of $1000? Is the bond selling at premium, at par, or at discount? How can you tell?

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FOUNDATIONS OF FINANCE- MYFINANCELAB

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