You buy an 6.9% coupon, paid annually, 11-year maturity bond for $965. A year later, the bond price is $1,075. Face value of the bond is $1,000. 1.What is the yield to maturity on the bond today? (Round your answer to 2 decimal places.) 2. What is the yield to maturity on the bond in one year? (Round your answer to 2 decimal places.) 3. What is your rate of return over the year? (Round your answer to 2 decimal places.)
You buy an 6.9% coupon, paid annually, 11-year maturity bond for $965. A year later, the bond price is $1,075. Face value of the bond is $1,000. 1.What is the yield to maturity on the bond today? (Round your answer to 2 decimal places.) 2. What is the yield to maturity on the bond in one year? (Round your answer to 2 decimal places.) 3. What is your rate of return over the year? (Round your answer to 2 decimal places.)
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 9P
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A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
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It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
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