How to find yield to maturity

    • [DOC File]Chapter 10

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      For a given yield to maturity, a bond’s value rises as its maturity increases. When yield to maturity equals the coupon rate, a bond’s current price equals its face value regardless of years to maturity. 4. Consider a coupon bond that has a $1,000 per value and a coupon rate of 10%. The bond is currently selling for $1,150 and has 8 years ...

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    • [DOC File]Tuesday February 27, 2007

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      a. 10 percent coupon rate bond, with 20 years to maturity and a 14 percent yield to maturity. b. 12 percent coupon rate bond with 10 years to maturity and an 8 percent yield to maturity. 12-4. a) 73.34% × $1,000 = $ 733.40. b) 127.18% × $1,000 = $1,271.80. Use of bond table. 5. Using Table 12–3:

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    • [DOC File]Bond Features

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      You will find that the yield to maturity on a semi-annual basis is 4.26%. This implies a bond equivalent yield to maturity equal to: 4.26% 2 = 8.52%. Effective annual yield to maturity = (1.0426)2 – 1 = 0.0870 = 8.70%. b. Since the bond is selling at par, the yield to maturity on a semi-annual basis is the same as the semi-annual coupon rate ...

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    • Yield to Maturity (YTM) | Calculation Methods & Example

      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]Solutions to Questions and Problems

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      b. When the market yield increases, the bond price will fall. The cash flows are discounted at a higher rate. c. At a lower price, the bond’s yield to maturity will be higher. The higher yield to maturity on the bond is commensurate with the higher yields available in the rest of the bond market. d. Current yield = coupon payment/bond price.

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    • [DOC File]Quantitative Problem Chapter 3

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      22. To find the number of years to maturity for the bond, we need to find the price of the bond. Since we already have the coupon rate, we can use the bond price equation, and solve for the number of years to maturity. We are given the current yield of the bond, so we can calculate the price as: Current yield = …

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    • [DOC File]Soln Ch 13 Bond prices

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      You will find that the yield to maturity on a semi-annual basis is 4.26%. This implies a bond equivalent yield to maturity of: 4.26% ( 2 = 8.52%. Effective annual yield to maturity = (1.0426)2 – 1 = 0.0870 = 8.70%. Since the bond is selling at par, the yield to maturity on a semi-annual basis is the same as the semi-annual coupon, 4%.

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