jsinjar5119 jsinjar5119
  • 16-01-2020
  • Business
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What is the yield to maturity on a 3​-year, ​$1000 discount bond with a current price of ​$915​?

Respuesta :

shahzaibnaeem37 shahzaibnaeem37
  • 17-01-2020

Answer:

The YTM of the bond is 3%

Explanation:

In order to find the yield to maturity we need to know the bonds present value/price, its future value/par value, years to maturity and its coupon payments. In this question we are told that the PV of the bond is $915, the FV is $1,000 the years to maturity are 3 and it is a discount bond which means there are no coupon payments. In order to calculate the YTM of the bond we will input the following values in a financial calculator.

PV= -915

FV= 1,000

PMT=0

N=3

Compute I=3.00

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