# Question: A 15 year 7 percent coupon rate bond is selling for

A 15-year, 7 percent coupon rate bond is selling for $839.27.

a. What is the current yield?

b. What is the yield to maturity using the trial-and-error approach with annual calculations?

c. Why is the current yield higher/lower than the yield to maturity?

a. What is the current yield?

b. What is the yield to maturity using the trial-and-error approach with annual calculations?

c. Why is the current yield higher/lower than the yield to maturity?

**View Solution:**## Answer to relevant Questions

What is the approximate yield to maturity of a 14 percent coupon rate, $1,000 par value bond priced at $1,160 if it has 16 years to maturity? The following pattern for one-year Treasury bills is expected over the next four years: Year 1 -5% Year 2 -7% Year 3-10% Year 4-11% a. What return would be necessary to induce an investor to buy a two-year security? b. What ...What is the yield to maturity for the data in problem 6? Assume there are 10 years left to maturity. It is a $1,000 par value bond. Use the trial-and-error approach with annual analysis. How does the volatility of a stock influence the conversion premium? Based on your answer to problem 5, what is the downside risk as a percentage?Post your question