Suppose the following bond quote for IOU Corporation appears in the financial pa Coday's newspaper. Assume the bond has a face value of $1,000, it makes semiar nterest payments, and the current date is April 15, 2022. Company (Ticker) IOU (IOU) Coupon 7.0 Maturity April 15, 2038 Last Price Last Yield 104.26 ?? EST Volume (000s) 1,841 a. What is the yield to maturity of the bond? (Do not round intermediate calcula and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the current vield? (Do not found intermediate calculations and enter you

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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Suppose the following bond quote for IOU Corporation appears in the financial page of
today's newspaper. Assume the bond has a face value of $1,000, it makes semiannual
interest payments, and the current date is April 15, 2022.
Company
(Ticker)
IOU (IOU)
Coupon
7.0
a. YTM
b. Current yield
Maturity
April 15, 2038
Last Price Last Yield
104.26
??
a. What is the yield to maturity of the bond? (Do not round intermediate calculations
and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the current yield? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g., 32.16.)
13.17 %
7.27 %
EST
Volume
(000s)
1,841
Transcribed Image Text:Suppose the following bond quote for IOU Corporation appears in the financial page of today's newspaper. Assume the bond has a face value of $1,000, it makes semiannual interest payments, and the current date is April 15, 2022. Company (Ticker) IOU (IOU) Coupon 7.0 a. YTM b. Current yield Maturity April 15, 2038 Last Price Last Yield 104.26 ?? a. What is the yield to maturity of the bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the current yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 13.17 % 7.27 % EST Volume (000s) 1,841
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