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you buy a sml bond for 980 the bond has a

You buy a SML Bond for $980. The bond has a face value of $1000 and an yearly coupon rate of 8%. There are five years left until maturity.

a. What is the yield to maturity on the bond?

b. At the end of 2 years, the price has risen to $1050. What is the yield to maturity based on the latest price?

c. Due to a special delivery by the stork, you decide to sell the bond at the end of year 2 for $1050. What was your return? Why does this differ from the yield to maturity? Suppose you do get the first 2 coupon payments.

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Finance Basics: you buy a sml bond for 980 the bond has a

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Finance Basics: you buy a sml bond for 980 the bond has a

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