Current yield to maturity

    • [DOC File]Chapter 10 #1 P

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      Apr 03, 2009 · The Hartford Telephone Company has a $1,000 par value bond outstanding that pays 11 percent annual interest. The current yield to maturity on such bonds in the market is 14 percent. Compute the price of the bonds for these maturity dates: a. 30 years. PVA = A * PVIFA (n = 30, i = 14%) Appendix D. PVA = $110 * 7.003 = $770.33

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    • [DOC File]Sample midterm

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      current yield=coupon/price= 100/900=11.11%. yield to maturity=from calculator=1 1.75%. capital gain yield= yield to maturity-current yield=0.64%. 15. If an investor purchases a bond when its current yield is higher than the coupon rate, then the bond's price will be expected to: A) increase over time, reaching par value at maturity.

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    • [DOC File]Soln Ch 13 Bond prices

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      If the yield to maturity is greater than the current yield, then the bond offers the prospect of price appreciation as it approaches its maturity date. Therefore, the bond must be selling below par value. 16. The coupon rate is less than 9%. If coupon divided by price equals 9%, and price is less than par, then price divided by par is less than 9%.

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

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      15. A bond has a current yield of 9% and YTM of 10%. Is the bond selling above or below par-value? Recall that current yield equals the annual coupon divided by the bond price. So if the YTM is greater than the current yield, the bond must offer the prospect of price appreciation as it approaches its maturity …

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    • [DOC File]CHAPTER 7

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      Current yield and yield to maturity Answer: e Diff: M. Statement e is the correct choice. If a bond sells for less than par, then its yield to maturity will exceed its coupon rate. If a bond sells at par, then its current yield, yield to maturity, and coupon rate are all the same.

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    • [DOC File]Bond Yields and Prices

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      Current Yield to maturity (discount factor) Need to weight present value of cash flows from bond by time received. In order for a bond to be protected from the changes in interest rates after purchase, the price risk and coupon reinvestment must offset each other.

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    • [DOC File]Tuesday February 27, 2007

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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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