Question: 1. (Yield to maturity) The market price of Energy Group Plc. bonds is currently $730. The bonds were issued several years ago with par value ($1,000) and mature in 7 years. The company promises its bond holders to pay annual coupon rate 8 percent. Calculate the yield to maturity of Energy Group Plc. bonds.
2. (Yield to maturity) You own a 10-year bond that pays 6 percent interest annually. The par value of the bond is $1,000, and the market price of the bond is $900. What is the yield to maturity of the bond?