What is the current yield and yield to maturity


Problem: A bond has a $1,000 par value, 10 years to maturity, a 7 percent annual coupon, and sells for $985.

Q1. What is its current yield?

Q2. What is its yield to maturity (YTM)?

Q3. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today?

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Finance Basics: What is the current yield and yield to maturity
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