Author Question: What does the yield to maturity on bonds refer to? (Read 29 times)

rubiosusy7 · **on:** Aug 7, 2023

Question 1

Wachowicz Corporation issued 20-year, noncallable, 8.6% annual coupon bonds at their par value of $1,000 four years ago. Today, the market interest rate on these bonds is 6.3%. What is the current price of the bonds, given that they now have 16 years to maturity?

◦

$1,227.72

◦

$1,248.05

◦

$1,271.00

◦

$1,295.60

Question 2

What does the yield to maturity on bonds refer to?

◦

the expected rate of return on the bonds if purchased at the current price and held to maturity

◦

the promised rate of return on the bonds if purchased at the current price and held to maturity

◦

the ratio of the annual interest payment divided by the bond’s current price

◦

the rate of return due to the interest payment plus the rate of return due to the price change

ladan86 · **Reply #1 on:** Aug 7, 2023

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 39% of students answer this correctly