What is the approximate yield to maturity for a five-year bond that pays 4% interest on a $1000 face value annually if the bond sells for $952?
A) 5.4%
B) 4.3%
C) 6.5%
D) 5.1%

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) can be calculated using the formula for YTM of a bond, which considers the annual coupon payment, the face value, the price of the bond, and the number of years to maturity. In this case, the bond pays $40 annually, has a face value of $1000, sells for $952, and matures in 5 years. The YTM is approximately 5.1%.

What Is the Approximate Yield to Maturity for a Five-Year