Question: What s the difference between current yield and yield to maturity
What’s the difference between current yield and yield to maturity? Between promised yield and realized yield? How does YTC differ from YTM?
Answer to relevant QuestionsBriefly describe the term bond-equivalent yield. Is there any difference between promised yield and bond-equivalent yield? Explain. An investor is considering the purchase of a $1,000 par value bond with an 8% coupon rate (with interest paid semiannually) that matures in 5 years. If the bond is priced to yield 6%, what is the bond’s current price? A 10%, 25-year bond has a par value of $1,000 and a call price of $1,075. (The bond’s first call date is in 5 years.) Coupon payments are made semiannually. a. Find the current yield, YTM, and YTC on this issue, given that ...A bond has a Macaulay duration of 8.62 and is priced to yield 8%. If interest rates go up so that the yield goes to 8.5%, what will be the percentage change in the price of the bond? Now, if the yield on this bond goes down ...A 20-year bond has a coupon of 10% and is priced to yield 8%. Calculate the price per $1,000 par value using semiannual compounding. If an investor purchases this bond 2 months before a scheduled coupon payment, how much ...
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