A General Co. bond has an 8% coupon and pays interest annually. The face value is $1,000 and the current market price is $1,020.50. The bond matures in 20 years. What is the yield to maturity?

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) is the rate of return anticipated on a bond if held until it matures. It can be calculated using a financial calculator or spreadsheet by inputting the bond's current market price, face value, coupon rate, and time to maturity. For this bond, the YTM is approximately 7.79%.