What is the yield to maturity of a bond with the following characteristics? Coupon rate is 8% with semiannual payments,current price is $960,3 years until maturity.
A) 4.78%
B) 5.48%
C) 9.57%
D) 12.17%

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) is the internal rate of return (IRR) of the bond's cash flows. Given the bond's price, coupon rate, and time to maturity, the YTM can be calculated using a financial calculator or spreadsheet. For this bond, the semiannual coupon payment is $40 (8% of $1000 face value, divided by 2), and the bond has 6 periods (3 years x 2). Solving for YTM using these inputs gives approximately 9.57% annualized.

What Is the Yield to Maturity of a Bond with the Following