Determine the ytm of a level-coupon bond


What is the YTM of a level-coupon bond whose price is equal to the principal paid at maturity? For example, take a 5-year bond that costs $1,000, pays 5% coupon ($50 per year) for 4 years, and finally repays $1,050 in principal and interest in year 5.

Solution Preview :

Prepared by a verified Expert
Finance Basics: Determine the ytm of a level-coupon bond
Reference No:- TGS0554383

Now Priced at $5 (50% Discount)

Recommended (91%)

Rated (4.3/5)