Find the bond-s yield to maturity


1. Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods):

  • a.What is the maturity of the bond (in years)?
  • b.What is the coupon rate (in percent)?
  • c.What is the face value?

2. Suppose a 10-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading for a price of $1034.74.

  • a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?
  • b. If the bond's yield to maturity changes to 9% APR, what will the bond's price be?

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Finance Basics: Find the bond-s yield to maturity
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