To raise funds for Gravina Island Bridge,the Government of Alaska issued bonds.The bonds,called "Nowhere Bonds" have a face value of $1,000,15 years to maturity and a 7% coupon rate (annual coupons with the first coupon due in one year).The bonds are priced at $771.82.What is the yield to maturity of the Nowhere Bonds?

Question

Quizplus · Accepted Answer

P_bond = C × 11ea7fdb_fbff_4f58_a768_7bfd6fb5b764_TB2902_11 + 11ea7fdb_fbff_7669_a768_0b5bfc9463a1_TB2902_11 $771.82 = $70 × 11ea7fdb_fbff_766a_a768_3b2c4e82e6b9_TB2902_11 + 11ea7fdb_fbff_766b_a768_4b3584640b19_TB2902_11 k_d = 10% Using a financial calculator: N = 15, PMT = 70, PV = $-771.82, FV = 1,000, CPT I/Y = 10%

To Raise Funds for Gravina Island Bridge,the Government of Alaska