A bond has an annual 8 percent coupon rate, a maturity of 10 years, a face value of $1,000, and makes semiannual payments. If the price is $934.96, what is the annual nominal yield to maturity on the bond?

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) can be calculated using the bond price, coupon rate, face value, and maturity. Given the bond's price of $934.96, semiannual coupon payments of $40 (8% of $1,000 annually, divided by 2), and a face value of $1,000 over 10 years (20 periods), the YTM is approximately 9% annually.

A Bond Has an Annual 8 Percent Coupon Rate, a Maturity