BCC has bonds that trade frequently, pay a 7.75 percent coupon rate, and mature in 2019. The

Question:

BCC has bonds that trade frequently, pay a 7.75 percent coupon rate, and mature in 2019. The bonds mature on March 1 in the maturity year. Suppose an investor bought this bond on March 1, 2014, and assume interest is paid annually on March 1. Calculate the yield-to-maturity assuming the investor bought the bond at the following price, as quoted in the financial press:

a. 100

b. 90

c. 105

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... 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...