Current yield and yield to maturity

    • [PDF File]Yield to Maturity - University at Albany

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      Financial Economics Yield to Maturity Yield to Maturity The yield to maturity is the rate of return obtained by buying a bond at the current market price and holding it to maturity. 1 Financial Economics Yield to Maturity No Default In the calculation of the yield to maturity, one assumes that there will be no default: all payments will be made ...

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    • [PDF File]End of Chapter 3 Problems - George Mason University

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      d. A bond's coupon rate is less than its yield to maturity. e. A bond's coupon rate is greater than its yield to maturity. f. A bond's fair present value is less than its face value. 13. Calculate the yield to maturity on a 9 percent coupon (paid semiannually) bond, with a $1,000 face value and 15 years remaining to maturity. The bond is ...

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    • [PDF File]5/3/2014 Nattawoot Koowattanatianchai 1 - Kasetsart University

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      (current yield) current yield = annual coupon / bond price 60/802.07 = .0748 หรือ 7.48% YTM: อัตราคิดลดที่ท าให้ PV ของกระแสเงินสดจากหุ้นกู้ เท่ากับราคาตลาด

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    • [PDF File]Yield curve primer Final Final - City University of New York

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      than face value, or at a discount price, of $900, the current yield would be higher at 6.6% ($60/ $900). • Yield to maturity reflects the total return an investor receives by holding the bond until it matures. A bond’s yield to maturity reflects all of the interest payments from the time of purchase until maturity, including interest on ...

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    • [PDF File]Chapter 06 - Bonds and Other Securities - University of Florida

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      decides an 8 year bond would be preferable. Current yield rates are 7% convertible semiannually. The investor uses the proceeds from the sale of the 10% bond to purchase a 6% bond with semiannual coupons, maturing at par at the end of 8 years. Find the par value of the 8-year bond. - - - - - - - - - - 6-13

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    • [PDF File]FIN 350 { Business Finance Homework 3 Fall 2014 Solutions …

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      The current yield of the bond is: current yield = annual interest bond price = $40 $1;038:56 = 0:0385 The current yield of the STRIP is 0%, since it does not pay interest. (e) Which would have a higher yield-to-maturity: the bond or the STRIP? The STRIP must have a higher yield-to-maturity. The STRIP’s yield-to-maturity is 1.4%, since this is ...

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    • [PDF File]The Term Structure of Interest Rates, Spot Rates, and Yield …

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      think of yield to maturity as some sort of average of the two spot rates.2 Using these spot rates, the yield to maturity of a two-year coupon bond whose coupon rate is $120 _____ 1 r $1,120 _____ (1 r)2 r 9.89% As these calculations show, two bonds with the same maturity will usually have different yields to maturity if the coupons differ.

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    • [PDF File]Prof. Dr. DEDEN MULYANA, SE., M.Si. - FINANCIAL …

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      Nominal yield Current yield Yield to maturity (YTM) Yield to call (YTC) Realized (horizon) yield Mengukur tingkat kupon Mengukur tingkat pendapatan sekarang Mengukur tingkat return yang diharapkan jika obligasi disimpan sampai waktu jatuh temponya

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    • [PDF File]Yield to Maturity - New York University

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      Yield to Maturity 2 Definition of Yield Suppose a bond (or portfolio of bonds) has price P and positive fixed cash flows K 1, K 2,..., K n at times t 1, t 2,..., t n. Its yield to maturity is the single rate y that solves: Note that the higher the price, the lower the yield. Example • Recall the 1.5-year, 8.5%-coupon bond.

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    • [PDF File]Chapter

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      Calculating Yield to Maturity, II. • We can use the YIELD function in Excel: =YIELD(“Today”,“Maturity”,Coupon Rate,Price,100,2,3) • Enter “Today” and “Maturity” in quotes, using mm/dd/yyyy format. • Enter the Coupon Rate as a decimal. • Enter the Price as per hundred dollars of face value. • Note: As before,

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    • [PDF File]Financial Markets 2: Bonds - HEC Paris

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      The current yield is equal to the annualized coupon divided by its price y = zC P The yield to maturity is the discount rate y that makes the present value of the bond’s cash-flows equal to its current price. P = C (1 + y)t1 + C (1 + y)t2 + ···+ C + N (1 + y)T where ti is the years to wait for receiving the i-th coupon.

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    • A Note on Yield-to-Maturity Approximations - JSTOR

      YIELD-TO-MATURITY APPROXIMATIONS yield to maturity, yield to call, and real ized yield. Nominal yield, also called cou pon rate, is the rate of interest that the bond promises to pay on its face value, the amount to be paid at maturity. The current yield is the annual amount of in terest, termed the coupon, divided by the market price of the ...

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