Assume you purchased a high-yield corporate bond at its current market price of $850 on January 2,

Question:

Assume you purchased a high-yield corporate bond at its current market price of $850 on January 2, 2004. It pays 9 percent interest and it will mature on December 31, 2013, at which time the will pay you the of $1,000.
a. Determine the current yield on your bond investment at the time of purchase.
b. Determine the yield to on your bond investment.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...