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Calculate the YTM on STRIPS

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Question - Calculate the YTM on STRIPS - Suppose the principle STRIPS maturity in July 2025. the asked price at the closed on July 2026 (or present value) is 98.276%. When STRIPS matures on July 15, 2026 (in 0.96521 year , (95.521%). the STRIPS holder will receive 100% of the face value (or future value). Using semiannual compounding, calculate he yield to maturity (YTM) and provide the brief interpretation.

Reference no: EM133032631

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