1. Evaluate the current yield (CY) and yield-to-maturity (YTM) on 8-year and 10 percent annual rate coupon bond, having face value of $4,000 and selling initially (at the bond’s issuance date) for $3,500 at a market annual discount rate of 9 percent? Consider the bond’s time to maturity is 2 years?

2. Compare and reflect on changes in bond’s CY and YTM for at least two periods?

Answer rating: 100% (QA)

To calculate the current yield CY we need to divide the annual coupon payment by the current market ... View the full answer