A corporate bond with a face value of $1,000 matures in 4 years and has a 8% coupon paid at the end of each year.The current price of the bond is $932.What is the yield to maturity for this bond?
A) 5.05%.
B) 8.58%.
C) 10.15%.
D) 11.92%.
E) 6.48%.

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) is calculated by solving the equation for the bond price, which equates the present value of future cash flows (coupon payments and face value) to the current price. Using a financial calculator or iterative method, the YTM is approximately 10.15%.

A Corporate Bond with a Face Value of $1,000 Matures