Maturity on the bond, Finance Basics

You buy a SML Bond for $980.  The bond has a face value of $1000 and an yearly  coupon rate of 8%.  There are five years left until maturity.

a. What is the yield to maturity on the bond?

b. At the end of 2 years, the price has risen to $1050.  What is the yield to maturity based on the latest  price?

c. Due to a special delivery by the stork, you decide to sell the bond at the end of year 2 for $1050.  What was your return?  Why does this differ from the yield to maturity? Suppose you do get the first 2 coupon payments.

 

Posted Date: 3/18/2013 8:53:37 AM | Location : United States







Related Discussions:- Maturity on the bond, Assignment Help, Ask Question on Maturity on the bond, Get Answer, Expert's Help, Maturity on the bond Discussions

Write discussion on Maturity on the bond
Your posts are moderated
Related Questions
Earnings Method or Earning Basis Valuation By using the earning valuation method, a company will employ its P/E ratio to value its shares. P/E    =  MV/E MV    =   E x P

Question 1: (a) What is meant by underwriting? (b) How can underwriting be used to manage the risks of a life insurance company? (c) Give and describe the three types of

Turnover Ratios Turnover Ratios/efficiency/asset management ratio Turnover ratio shows the efficiency along with that the firm utilized the asset or resources at its dispos

If the winner’s prize increases at the same rate (8.43%), what will it be in 2041?

Before purchasing insurance we have to go through different factors. Among different important factors there are two most crucial aspects we should consider before buying insurance

what is the exact nature of IDB sukuk

Cost of capital: The cost of capital is a term related to the field of financial investment to refer to the cost of a company's funds (both equity and debt), from an investor'

I need to understand a practice question for exam, but I only have a partial solution. I need a more detailed solution, so can understand how to arrive at the answer. The problem

Question   Clifton-Peters Ltd is a manufacturer of household goods located in Melbourne. They presently make and wholesale fruit juicers, blenders and baking equipment. The Gen

The table below gives data on the average number of football games attended per year among a population of students at a small college, separately by major. All students are in one