Formula for ytm rate

    • [DOC File]Econ 175 - University of California, San Diego

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      What’s the YTM? What will the realized compound YTM be if the one-year interest rate next year turns out to be 8%, 10%, 12%? Ok, we have c = 10%, and 100(1+r)+1100 = total proceeds. The formula we need is: a. r = 8% total proceeds = 1100+108 = $1208. so realized YTM is about 9.91%. b. r = 10% total proceeds = 1100+110 = $1210. so realized YTM ...

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    • [DOCX File]Unisa Study Notes

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      Example of Yield to Maturity Formula The price of a bond is $920 with a face value of $1000 which is the face value of many bonds. Assume that the annual coupons are $100, which is a 10% coupon rate, and that there are 10 years remaining until maturity.

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    • [DOC File]Bond Yields and Prices

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      Required yield is the current market rate earned on comparable bonds with same maturity and credit risk. Coupon Rate - YTM Relationship. Coupon Rate > YTM sell at premium. Coupon Rate < YTM sell at discount. Coupon Rate = YTM sell at par or face value. Bond Price Changes

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    • [DOC File]Chapter 10

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      Since the bond payments are now made annually instead of semi-annually, the bond equivalent yield to maturity is the same as the effective annual yield to maturity. The inputs are: n = 20, FV = 1000, PV = –price, PMT = 80.

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    • [DOC File]Bond Features

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      3. The yield to maturity (or “YTM”) is the interest rate required in the market on a bond. In other words, YTM is the rate that makes the price of the bond just equal to the present value of its future cash flows. Suppose the current bond price is $930. Annual coupon rate is 7%, maturity is 10 years from now, and face value is $1000. Find YTM.

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    • [DOC File]Quantitative Problems Chapter 10

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      With PV $819, FV $1,000, PMT 0 and N 2, the yield to maturity on the two-year zero-coupon bonds is 10.5% for the two-year annuities, PV $1,712.52, PMT 0, FV $2,000 and N 2 gives a yield to maturity of 8.07%. The zero-coupon bonds are the better buy. 5. Consider the following cash flows. All market interest rates are 12%.

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    • [DOC File]Bond Prices and Yields

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      Given market rate (kd) you can solve for PRICE. Given PRICE you can solve for kd (market rate or yield to maturity) Sample Problem #1 – Solving for Price. Given a 4-year bond with a $1000 face value and a 5% coupon rate, annual compounding (annual periodic interest payments), find the price of the bond if the market rate for similar bonds is 6%.

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    • [DOC File]Chapter 7

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      Additionally, the non-text book solutions for the YTM questions are presented using linear interpolation. However, you may use the Rodriques formula to do all of them, even in the exams!) M = $1,000; I = $1,000 x 8% = $80; k = 12% & n = 12 years

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    • [DOCX File]Implied Forward Rates

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      If we are indifferent between the two investments, it’s because we expect the 6-mo rate. 6-mo from now to be 5.4%. It is the . Implied Forward Rate. The same principle can be used to get any implied forward rate The general formula is: 1 + 1 f 2 = (1 + z 2)2 (1 + z. 1)where z. …

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