Determining the yield to maturity


Problem:

A bond has a $1000 par value, 10 years to maturity, and a 7% annual coupon adn sells for $985.

Requirement:

Question 1: What is its yield to maturity (YTM)?

Question 2: Assume that the yield to maturity remains constant for the next 3 years. What will the pricebe 3 years from today?

Note: Show supporting computations in good form.

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Accounting Basics: Determining the yield to maturity
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