A coupon bond that pays interest of $90 annually has a par value of $1,000,matures in 9 years,and is selling today at a $66 discount from par value.The yield to maturity on this bond is __________.

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) can be calculated using the formula for YTM, which considers the annual coupon payment, the par value, the current price, and the number of years to maturity. Given the bond's annual coupon payment of $90, a par value of $1,000, a current price of $934 ($1,000 - $66), and a maturity of 9 years, the YTM is approximately 10.15%.

A Coupon Bond That Pays Interest of $90 Annually Has