What is bond yield to maturity

    • [DOC File]CHAPTER 14: BOND PRICES AND YIELDS

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      The yield to maturity is the required rate of return on a bond expressed as a nominal annual interest rate. For noncallable bonds, the yield to maturity and required rate of return are interchangeable terms.

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    • [DOC File]Bond Yields and Prices

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      If the bond has a life of 20 years, pays annual coupons, and the yield to maturity is 7.5%, what percent of the bond's total price is represented by the present value of the coupons? 3. Which bond would most likely possess the least degree of interest rate risk? A) 8% coupon rate, 10 years to maturity . B) 10% coupon rate, 10 years to maturity

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    • [DOC File]Bond Features - University of Kentucky

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      May 30, 2007 · Current yield, capital gains yield, and yield to maturity . Hooper Printing Inc. has bonds outstanding with 9 years left to maturity. The bonds. have an 8 percent annual coupon rate and were issued 1 year ago at their par value. of $1,000, but due to changes in interest rates, the bond's market price has fallen to. $901.40. The capital gains ...

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    • [DOC File]Problems - Kent State University

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      Current yield: a bond’s annual coupon divided by the bond price. Yield to maturity. The market interest rate for bonds with similar features. This is the discount rate that equates a bond’s price with the present value of is future cash flows. 3. The yield to maturity (or “YTM”) is the interest rate required in the market on a bond.

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    • [DOC File]Current yield, capital gains yield, and yield to maturity

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      A semiannual corporate bond has a face value of $1,000, a yield to maturity of 7.2 percent, and a coupon rate of 7.5 percent. The bond matures 10 years from today.

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    • [DOC File]Chapter 01 Quiz A

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      Consider a bond that promises the following cash flows. The yield to maturity is 12%. You plan to buy this bond, hold it for 2.5 years, and then sell the bond. What total cash will you receive from the bond after the 2.5 years? Assume that periodic cash flows are reinvested at 12%.

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    • [DOC File]Solutions to Questions and Problems

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      YTM = the rate of return earned on a bond if it is held to maturity. Current yield = provides information regarding the amount of cash income that will be generated in a given year, but does not provide an accurate measure of the total expected return. 1. A 10 percent semiannual coupon bond matures in 8 …

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    • Yield to Maturity vs. Coupon Rate: What's the Difference?

      D) yield to maturity. Answer: C. 12. Which of the following bonds would be likely to exhibit a greater degree of interest-rate risk? A) A zero-coupon bond with 20 years until maturity. B) A coupon-paying bond with 20 years until maturity. C) A floating-rate bond with 20 years until maturity. D) A zero-coupon bond with 30 years until maturity ...

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    • [DOCX File]Homework Assignment – Week 2

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      Three years from now, the bond will be selling at the par value of $1,000 because the yield to maturity is forecast to equal the coupon rate. Therefore, total proceeds in three years will be: $226.39 + $1,000 =$1,226.39. Then find the rate (yrealized) that makes the FV of the purchase price equal to $1,226.39:

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    • [DOC File]1 - San Francisco State University

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      The weighted average maturity of a bond’s cash flows needed to recover the cost of the bond. Weights determined by present value of cash flows. Duration depends on three factors. Maturity of the bond. Coupon payments. Current Yield to maturity (discount factor) Need to weight present value of cash flows from bond by time received

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