You observe the following information about bonds a and b


Question: You observe the following information about bonds A and B, both of which make semiannual coupon payments (with payments occurring at the end of each semiannual period). The YTM is stated as an APR. When solving for the YTM, please state your final answer as an APR. When computing coupon payments and par value, you can round your answer to the nearest cent. Please fill in the missing information in the table below. Bond Par value Time to maturity Coupon rate [1] Current yield (CY) * YTM Price Bond A $100 4 years 10.00% 11.7729% Bond B 6 years 12.2209% 11.50% $1,063.75 [1] Following the industry convention, here and in the following question, the coupon rate is stated on an annual basis. For example, a coupon rate of 10% on a bond with a par value of $1,000 implies that the annual amount of coupon payments is $100 (10% of $1,000), which is paid in two semiannual installments of $50 each. When solving for the coupon rate, please state it in the same manner (i.e. on an annual basis). * The current yield (CY) is stated based on an annual coupon and the market price of the bond. For example, a current yield of 10%, given a bond market price of $900 implies that the amount of annual coupon is $90 (10% of $900), i.e. that the bond makes two semiannual interest payments of $45 each.

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Finance Basics: You observe the following information about bonds a and b
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