(Financial calculator required.) Lisa can purchase bonds with 15 years until maturity, a par value of $1,000, and a 9 percent annualized coupon rate for $1,100. Lisa's yield to maturity is ____ percent.

Question

Quizplus · Accepted Answer

Using a financial calculator, we can solve for the yield to maturity (YTM) using the following inputs:

N = 15 (number of years until maturity)
PV = -1100 (price paid for the bond)
PMT = 90 (annual coupon payment, which is 9% of the $1,000 par value)
FV = 1000 (par value)

Solving for I/Y (the YTM) gives us approximately 7.84%. Therefore, the answer is B.

(Financial Calculator Required