A bond currently sells for $925,has 7 years left to maturity and pays a 9% annual coupon.What is the YTM?

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) is calculated by solving the equation for the present value of the bond's cash flows, which include the annual coupon payments and the face value at maturity, equating it to the bond's current price. Given the bond's price of $925, a 9% annual coupon, and 7 years to maturity, the YTM is approximately 10.57%.

A Bond Currently Sells for $925,has 7 Years Left to Maturity