HomeworkLib
Question

Scott Turner has a bond with 10 years to maturity, a face value of $1,000, an...

Scott Turner has a bond with 10 years to maturity, a face value of $1,000, an 8% interest rate, and a market price of $800. What is the yield-to-maturity on this bond?

A. 4.00 percent

B. 6.67 percent

C. 8.00 percent

D. 10.00 percent

E. 11.11 percent
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

using excel rate function

Yield to maturity

= RATE(number_of_periods, payment_per_period, present_value, [future_value], [end_or_beginning], [rate_guess])

= RATE(10,80,-800,1000)

= 11.11%

hence choose E)

0 0
Add a comment
Know the answer?
Add Answer to:
Scott Turner has a bond with 10 years to maturity, a face value of $1,000, an...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 19. A bond has 8 years to maturity, a 7 percent coupon, a $1,000 face value,...

    19. A bond has 8 years to maturity, a 7 percent coupon, a $1,000 face value, and pays interest semi-annually. What is the bond's current price if the yield to maturity is 6.97 percent? A. $799.32 B. $848 16 C. $917.92 D. $1,005.46 E. None of the above.l 19. A bond has 8 years to maturity, a 7 percent coupon, a $1,000 face value, and pays interest semi-annually. What is the bond's current price if the yield to maturity is...

  • A bond with 10 years to maturity has a face value of $1,000. The bond can...

    A bond with 10 years to maturity has a face value of $1,000. The bond can be called in four years for $1050. The bond pays an 6 percent semiannual coupon, and the bond has a 4.5 percent nominal yield to maturity.  What is the price of the bond today assuming that it will be called?

  • The 6.9 percent bond of Peters Pickles has a face value of $1,000, a maturity of...

    The 6.9 percent bond of Peters Pickles has a face value of $1,000, a maturity of 15 years, semiannual interest payments, and a yield to maturity of 7.11 percent. What is the current market price of the bond? A) $1,081.28 B) $987.95 C) $980.82 D) $990.80 E) $952.60

  • A bond that compounds annually has a Face Value of $1,000 and maturity of 15 years....

    A bond that compounds annually has a Face Value of $1,000 and maturity of 15 years. Assume that its coupon rate is 8% and yield to maturity (YTM) is 6.12%. What is this bond’s market price?

  • A bond has a face value of $1,000, a coupon rate of 8%, and a maturity...

    A bond has a face value of $1,000, a coupon rate of 8%, and a maturity of 10 years. It pays interest annually, and the yield to maturity is 12%. In WORDS (1-2 complete sentences each) answer the following questions. What does it mean that the bond above has a face value of $1,000? What does it mean that the bond has a coupon rate of 8%? What does it mean that the bond has a maturity of 10 years?...

  • bond X and bond Y. Bond X has a face value of $1,000 and 10 years...

    bond X and bond Y. Bond X has a face value of $1,000 and 10 years to maturity and has just been issued at par. It bears the current market interest rate of 7% (i.e. this is the yield to maturity for this bond). Bond Y was issued 5 years ago when interest rates were much higher. Bond Y has face value of $1,000 and pays a 13% coupon rate. When issued, this bond had a 15-year, so today its...

  • Consider two bonds: bond XY and bond ZW . Bond XY has a face value of $1,000 and 10 years to maturity and has just been...

    Consider two bonds: bond XY and bond ZW . Bond XY has a face value of $1,000 and 10 years to maturity and has just been issued at par. It bears the current market interest rate of 7% (i.e. this is the yield to maturity for this bond). Bond ZW was issued 5 years ago when interest rates were much higher. Bond ZW has face value of $1,000 and pays a 13% coupon rate. When issued, this bond had a...

  • The 4.5 percent bond of JL Motors has a face value of $1,000, a maturity of...

    The 4.5 percent bond of JL Motors has a face value of $1,000, a maturity of 7 years, semiannual interest payments, and a yield to maturity of 6.23 percent. What is the current market price of the bond? $945.08 $947.21 $903.05 $959.60 $912.40

  • 1) A $1,000 face value bond currently has a yield to maturity of 6.03 percent. The...

    1) A $1,000 face value bond currently has a yield to maturity of 6.03 percent. The bond matures in thirteen years and pays interest semiannually. The coupon rate is 6.25 percent. What is the current price of this bond? 2) The $1,000 face value bonds of Galaxies International have coupon of 5.5 percent and pay interest semiannually. Currently, the bonds are quoted at 98.02 and mature in 12 years. What is the yield to maturity? 3) Variance Logistics wants to...

  • A $1,000 face value bond currently has a yield to maturity of 6.69 percent. The bond...

    A $1,000 face value bond currently has a yield to maturity of 6.69 percent. The bond matures in 3 years and pays interest annually. The coupon rate is 7 percent. What is the current price of this bond?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT