« previous next »

Author Question: If the par value of a bond is equal to the bond price, then we know the yield to maturity is equal ... (Read 76 times)

tuffie

  • Hero Member
  • *****
  • Posts: 534
on: Jul 10, 2018
If the par value of a bond is equal to the bond price, then we know the yield to maturity is equal to the coupon rate.
 
  Indicate whether the statement is true or false.

Question 2

Southern Transit Corporation has 1,000 par value, twenty-year, 6 annual coupon bonds, outstanding currently selling for 696.25. What is the yield to maturity on these bonds? Use a calculator for your answer.
 
  What will be an ideal response?


briezy

  • Sr. Member
  • ****
  • Posts: 347
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: TRUE

Answer to Question 2

Answer: 9.43. FV = 1,000; PMT = 1,000  .06 = 60; N = 20; PV = 696.25. CPT 1/Y to get 9.43.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Most fungi that pathogenically affect humans live in soil. If a person is not healthy, has an open wound, or is immunocompromised, a fungal infection can be very aggressive.

Did you know?

Many people have small pouches in their colons that bulge outward through weak spots. Each pouch is called a diverticulum. About 10% of Americans older than age 40 years have diverticulosis, which, when the pouches become infected or inflamed, is called diverticulitis. The main cause of diverticular disease is a low-fiber diet.

Did you know?

A strange skin disease referred to as Morgellons has occurred in the southern United States and in California. Symptoms include slowly healing sores, joint pain, persistent fatigue, and a sensation of things crawling through the skin. Another symptom is strange-looking, threadlike extrusions coming out of the skin.

Did you know?

Illicit drug use costs the United States approximately $181 billion every year.

Did you know?

Eating food that has been cooked with poppy seeds may cause you to fail a drug screening test, because the seeds contain enough opiate alkaloids to register as a positive.

Directionality of the hydrogen bond Directionality of the hydrogen bond
Fossil Fuels Energy Yield and Pollutants—Comparison Fossil Fuels Energy Yield and Pollutants—Comparison
Wheat and Cotton Prices and Consumer Price Indexes, 1865–1896 Wheat and Cotton Prices and Consumer Price Indexes, 1865–1896
Torque is a twisting force equal to the distance from the pivot point times the force applied ... Torque is a twisting force equal to the distance from the pivot point times the force applied ...
What atomic or hybrid orbital on P make up the sigma bond between P and Cl in phosphorous ... What atomic or hybrid orbital on P make up the sigma bond between P and Cl in phosphorous ...
After 159 days,she paid a maturity value of $11,626, which included interest of $814. After 159 days,she paid a maturity value of $11,626, which included interest of $814.
Video: Introduction to Tuberculosis

For a complete list of videos, visit our video library