Maturity on the bond, Finance Basics

Assignment Help:

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.

 


Related Discussions:- Maturity on the bond

Earnings yield valuation, Earnings Yield Valuation EY is given via the...

Earnings Yield Valuation EY is given via the earnings made with the business expressed like a percentage of the market price of the business that is The Formula For Earning

Business finance and financial management, Business Finance and Financial M...

Business Finance and Financial Management Business finance is the process through which a financial manager or accountant gives finance for business use as and whenever it i

FUNCTIONS OF BUDGET, FUNCTIONS OF BUDGET THAT MUST BE PRESENT IN THE MUNICI...

FUNCTIONS OF BUDGET THAT MUST BE PRESENT IN THE MUNICIPAL FINANCIAL MANAGEMENT AND INDICATE HOW THESE FUNCTIONS CAN INFLUENCE MUNICIPAL FINANCIAL MANAGEMENT

Investment analysis, Investment Analysis Any type of company will inve...

Investment Analysis Any type of company will invest finance for the sake of deriving a return that is useful for four main purposes as: 1. To reward the owners or shareholder

Sources of funds - finance, Sources of Funds - Finance Venture capital...

Sources of Funds - Finance Venture capital, with combining risk financing along with marketing assistance and management, could become an effective instrument in fostering dev

Boq, management and directors

management and directors

What is expected return, 1. Using the variance-covariance matrix (∑) and th...

1. Using the variance-covariance matrix (∑) and the expected return vector (er) given in the appendix, calculate the set of weights that correspond to the portfolio that maximizes

Modern methods of capital projects, what are the modern methods of evaluati...

what are the modern methods of evaluating capital projects? how they different from old methods?

Student, evaluate the importance of leverage in financial management of a s...

evaluate the importance of leverage in financial management of a small scale company

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd