Yield, Price, and YTM
A corporate bond maturing in 22 years with a coupon rate of 8.2 percent was purchased for $1,100 and is now selling for $1,180. What is its current yield? Round your answer to one decimal place. %
Calculate the bond's YTM using Equation 14.5 or the Garman/Forgue companion website. Round your answer to two decimal places. %
What will the bond's selling price be if comparable market interest rates rise 1.8 percent points in two years? (Hint: Use Appendix A-2 and Appendix A-4 or the Garman/Forgue companion website.) Round Present Value of a Single Amount and Present Value of a Series of Equal Amounts in intermediate calculations to four decimal places. Round your answer to the nearest cent.