4. Consider a 30-year U.S. Treasury bond paying 4.5 percent coupon, and selling for $1010. What is the yield to maturity? Make sure to show your work.

5. A 30-year U.S. corporate bond with a 6 percent coupon rate is sold to an investor at a price of $925. What is his yield to maturity? If the investor sells the bond 8 years later for $995, what is his 8-year holding period yield? Make sure to show your work. 2

6. Consider a 30-year 8 percent bond, paying coupon semi-annually, and selling for $896.81 today (note that the yield is 9 percent). Find the holding period return if the interest rate drops to 8 percent after six months. Make sure to annualize the rate. Make sure to show your work.

Answer rating: 100% (QA)

Finding Yield to Maturity YTM We can find the Yield to Maturity YTM using a financial calculator or spreadsheet functions However we can also estimate ... View the full answer