Answered

Welcome to Westonci.ca, your go-to destination for finding answers to all your questions. Join our expert community today! Get immediate and reliable answers to your questions from a community of experienced professionals on our platform. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

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

Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. Get the answers you need at Westonci.ca. Stay informed with our latest expert advice.