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You have just bought a 5 year 10 annual coupon bond with a


You have just bought a 5 year 10% annual coupon bond with a par value of $1000 at a price of $963.04.

1) What is the YTM of the bond?

2) Immediately after you bought the bond, the market interest rate changed to 8% per year. If the interest rate does not change from this level for the next 5 years, what is the realized compound yield from the bond if you hold it until maturity?

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Financial Management: You have just bought a 5 year 10 annual coupon bond with a
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