Answered

Find the best answers to your questions at Westonci.ca, where experts and enthusiasts provide accurate, reliable information. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.

a $1,000,000, 20 year bond has a stated rate of 10% and sells for $928,000. what is the yield to maturity? multiple choice question.

Sagot :

tutorconsortium113

The Yield to maturity is the discount rate that equates then price of the bonds to the present of cash inflows expected from the bond

What is the yield to maturity?

The yield on the bond can be determined as follows using the formula below:  

YM = C + F-P/n) ÷ 1/2 (F+P)  

YM-Yield to maturity-  

C- annual coupon  

F- Face Value  

P- Current Price  

n- number of years

Coupon = coupon rate × Nominal value = 1,000 000× 10%=100000

Face Value = 1000000

YM-?, C- 100000, Face Value - 1,000000 P-911 , n- 10

YM = (100000+ (1000000-928000)/20) ÷ ( 1/2× (1000000 + 928000 )  

YM = 36000 / 1000 = 36%

Yield to Maturity =36%

To learn more about  yield to maturity refer

https://brainly.com/question/17155937

#SPJ4

Thanks for stopping by. We are committed to providing the best answers for all your questions. See you again soon. We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Westonci.ca is your go-to source for reliable answers. Return soon for more expert insights.