Arjen owns investment A and 1 bond B. The total value of his holdings is 2,596 dollars.

Question:

Arjen owns investment A and 1 bond B. The total value of his holdings is 2,596 dollars. Investment A is expected to pay annual cash flows to Arjen of 284.18 dollars per year with the first annual cash flow expected later today and the last annual cash flow expected in 3 years from today. Investment A has an of 10.79 percent. Bond B pays semi-annual coupons, matures in 12 years, has a of $1000, has a rate of 10.86 percent, and pays its next in 6 months. What is the yield-to-maturity for bond B? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
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... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... 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...