Dave Harris has just purchased a bond with a face value of $1,000 that pays 6 percent.The purchase price of the bond was $900,and the bond will mature in 5 years.What is the yield to maturity for this bond?
A)5.5 percent
B)6.0 percent
C)8.4 percent
D)9.0 percent
E)6.7 percent

Question

Quizplus · Accepted Answer

[(1,000 F1F1F1S1F1F1F106%) + {(1,000 - 900) / 5}] / [(900 + 1000) / 2] = (60 +20) / 950 = .084 = 8.4 percent.

Dave Harris Has Just Purchased a Bond with a Face