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A bond with a par value of $1,000 and a coupon rate of 7.25% has a...

A bond with a par value of $1,000 and a coupon rate of 7.25% has a current market value of $1,030. What is its yield to maturity? The bond has 8 years to maturity.

Group of answer choices

6.75%

7.24%

6.19%

7.13%

6.85%

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Answer #1

Par Value =1000
Coupon =7.25%*1000 =72.50
Number of years of Maturity =8
Current Value =1030
YTM using financial Calculator
N=8;PMT=72.50;PV=-1030;FV=1000;CPT I/Y =6.75% (Option a is correct option)

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