Take the example of two straight yen Eurobonds with the same maturity of five years. Bond A has a coupon of 12% and Bond B a coupon of 8%. The current market interest rate on yen bonds is 9%. These two bonds have the same yield-to-maturity of 10% and are correctly priced at 111.67% for Bond A and 96.11% for Bond B. What would be the yield-to-maturity indicated by the simple yield calculation?

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The Answer of Take the example of two straight yen Eurobonds with the same maturity of five years. Bond A has a coupon of 12% and Bond B a coupon of 8%. The current market interest rate on yen bonds is 9%. These two bonds have the same yield-to-maturity of 10% and are correctly priced at 111.67% for Bond A and 96.11% for Bond B. What would be the yield-to-maturity indicated by the simple yield calculation?

Take the Example of Two Straight Yen Eurobonds with the Same