Question #140296

What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is 15 years, and sells for 119% with coupons rate of 10%? Assume the par value of the bond is $1,000.

Expert's answer

"P=1.19\\times1000=1190"

"1190=\\frac{50}{(1+r)^1}+\\frac{50}{(1+r)^2}+\\frac{50}{(1+r)^3}+\\frac{50}{(1+r)^4}+.....+\\frac{1050}{(1+r)^{30}}"

r=0.0391283

"YTM=(1+ 0.0391283)^2-1)\\times100=7.978"

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